EOC Problems $6-18$

$4$ Question $10$ of

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Problem $6-18$ Utility

Consider an investor with risk aversion of $A=4.$ The investor owns a portfolio with expected return of $12\mathrm{.}00\%$ and standard deviation of $0\mathrm{.}18\%.$

If an alternative portfolio had an expected return of $14\mathrm{.}00\%,$ what standard deviation would it need for the investor to be indifferent?

The standard deviation would need to be

$\%.$ Round your answer to the nearest two decimal places.

Should the investor switch to a portfolio with expected return of $10\%$ and standard deviation of $12\%?$

Yes

No