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A portfolio has an expected rate of return of 10% and a standard deviation of...

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Finance

A portfolio has an expected rate of return of 10% and a standard deviation of 16%. The risk-free rate is 2%. An investor has the following utility function: U = E(r) - (A/2)s2. Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset?

A. 6.25 B. 5.75 C. 6.75 D. 8 E. 5

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