Question: An investor has the utility function listed in problem 3 and is considering investing in the risky asset andriskfreeasset from problem 1. Y* =(E(Rp) -rf)/((A)(Variance

An investor has the utility function listed in problem 3 and is considering investing in the risky asset andriskfreeasset from problem 1.

Y* =(E(Rp) -rf)/((A)(Variance ofp))

If the investors coefficient of risk aversion constant A is 2.0, what is their optimal portfolio weight to invest in the risky asset?Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.

Here is problem 3:

A portfolio has an expected rate of return of 14% and a standard deviation of 22%. The risk-free rate is 4%. An investor has the following utility function:.

U = E(r)-1/2(A)²

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