Using sample average returns and standard deviations of the two investment strategies provided in class slides (S&P 500 and Volatility Strategy) calculate the certainty equivalent risk-free rate for the volatility strategy. Assume mean-variance utility with risk aversion coefficient equal to 2. Enter your answer in percentage points with two decimal spaces.

Average return is same for both = 10% Standard deviation Volatility strategy= 15.2% Standard deviation s&p 500 = 15.1% Mean for volatility strategy=9.9% mean for s&p 500= 9.7% skewness for volatility strat= -8.3% skewness for s&p 500 = -0.6% Kurtosis for volatility strategy = 104.4 kurtosis for s&p 500= 4.0

QUESTIONS Using sample average returns and standard deviations of the two investment strategies provided in class slides (S&P 500 and Volatility Strategy), calculate the certainty equivalent risk-free rate for the Volatility Strategy. Assume mean-variance utility with risk aversion coefficient equal to 2. Enter your answer in percentage points with two decimal spaces. QUESTION 6 QUESTIONS Using sample average returns and standard deviations of the two investment strategies provided in class slides (S&P 500 and Volatility Strategy), calculate the certainty equivalent risk-free rate for the Volatility Strategy. Assume mean-variance utility with risk aversion coefficient equal to 2. Enter your answer in percentage points with two decimal spaces. QUESTION 6