Question: ou are asked to do an asset allocation using one risk-free asset and one risky asset. The expected return for the risky asset is 15%

ou are asked to do an asset allocation using one risk-free asset and one risky asset. The expected return for the risky asset is 15% and the expected return for the risk-free asset is 5%. Assume the volatility of the risky asset is 18%. Your utility function is U = Rp A 2 2 p . If your risk aversion coefficient A equals 4. Whats your optimal allocation to the risky asset

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