Question 2: John has a utility function given by the expression U(X) = E(T) - XA[s). Where E() is the expected return on an asset and s is the standard deviation of returns on that asset. John has the opportunity to purchase the XIK security that returns 27% with 23% probability and returns 9% the remainder of the time. The security has a price of $33 and A-11 a) What is the risk-neutral valuation of the XIK security? Recall the risk-neutral value is simply the expected value. b) Using the utility function above, find John's risk-averse valuation of XJK security. Hint: Find John's certainty equivalent (CEQ) for this security's payoff. ) If the expected annual return on the market is 5.805%, the standard deviation of the market return is 9.2% and the risk-free rate for the next year is 1.29% then what is John's optimal percent of funds that he'll invest in the market? d) Use the rates given in partc to answer this question. Ifa stock had a Beta of 2.93 what would be the expected retum for that stock in the coming year