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  3. 1. consider the following assets in which to poten

1. Consider the following assets in which to potentially invest: Fund ABC Fund DEF...

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1. Consider the following assets in which to potentially invest: Fund ABC Fund DEF Government Bond Er 10% 9% 4% go 18% 25% 0% 0.3 a) Question 1: Without doing any calculations, what which risky asset, ABC or DEF, would you expect to hold more of in the optimal risky portfolio? b) Question 2: What is the weight of ABC in the optimal risky portfolio? c) Question 3: For an investor with a risk-aversion parameter A equal to 3, what is weight of the risk-free asset in the optimal complete portfolio? d) Question 4: For an investor with A

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