Consider a mean-variance utility function ( ) = ( ) 0.5()

Investor 1 has A=2, Investor 2 has A=5.

Both investors are considering investing in the two portfolios in Q1

Portfolio 1: 75% in the US, 25% in India

Portfolio 2: 25% in the US, 75% in India

a. Calculate certainty equivalent rate of return for both investors for both portfolios, show all work

b. Which portfolio will be preferred by each investor?

c. DRAW indifference curves for both investors.

d. What do the slopes of both investors indifference curve indicate?

Please show all required work and a short explanation! Thank you!