Question: Use the below information to answer the following question. U = E ( r ) ( A /2) s 2 , where A = 4.0.

Use the below information to answer the following question. U =

Use the below information to answer the following question.

U = E(r) (A/2)s2, where A = 4.0.

Based on the utility function above, which investment would you select ?

Which investment would you select if you were risk neutral ?

Investment 1 Expected Return E(r) Standard Deviation 0.12 0.13 2 0.15 0.15 3 0.21 0.16 4 0.24 0.21

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