Question: 8. Investment Expected return Standard Deviation 1 12% 30% 2 15% 50% 3 21% 16% 14% 21% Utility function U = E(r)-0.5*A*variance The variable A

8. Investment Expected return Standard Deviation 1 12% 30% 2 15%

8. Investment Expected return Standard Deviation 1 12% 30% 2 15% 50% 3 21% 16% 14% 21% Utility function U = E(r)-0.5*A*variance The variable A in the utility formula represents the preference for one unit of return per four units of risk 2 certainty equivalent rate of the portfolio 3 investor's return requirement investor's aversion to risk

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