Question: Laura has the following utility function: U = r o, where r denotes the return of the portfolio and o represents the standard deviation

Laura has the following utility function: U = r o, where "r" denotes the return of the portfolio and o represents the standard deviation of the portfolio. Laura is currently investing in a portfolio that has 27% returns and a standard deviation of 6%. Compute the Certainty equivalent for Laura (i.e., the amount of risk-free return that would make Laura indifferent between investing in the portfolio or getting the risk-free option)

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