Question: QUESTION 15 Investment Expected Return E(r) Standard Deviation 0.12 0.3 0.15 0.5 0.21 0.16 0.24 0.21 U = E(r) - (A/2) Var(), where A =

QUESTION 15 Investment Expected Return E(r) Standard Deviation 0.12 0.3 0.15

QUESTION 15 Investment Expected Return E(r) Standard Deviation 0.12 0.3 0.15 0.5 0.21 0.16 0.24 0.21 U = E(r) - (A/2) Var(), where A = 5. Based on the utility function above, which investment would you select? A cannot tell from the information given B.2 C.1 D.3 E. 4 QUESTION 16 A portfolio has an expected rate of return of 0.24 and a standard deviation of 0.3. The risk-free rate is 6 percent. An investor has the following utility function: U = E(r) - (A/2) Var(). Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset? A.5 B.4 OOOOO 0.6 U + 6 Nm

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