Question: Question 3 : Consider a portfolio that offers an expected rate of return of 7 % and a standard deviation of 1 8 % .

Question 3:
Consider a portfolio that offers an expected rate of return of 7% and a standard deviation of 18%. T-bills offers a risk-free 2% rate of return. What is the maximum level of risk aversion for which the risky portfolio is still preferred to T-bills?

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