Barklays is offering to clients a risky portfolio P called Haymarket Fund (HYMKX), which in...
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Barklays is offering to clients a risky portfolio P called Haymarket Fund (HYMKX), which in turn is made of a stock and a bond portfolios. The exepcted return of HYMKX is 10% and the volatility is 20%, while the risk free rate on 3-month T bills is 5%. Lars is a knowledgeable investor with a moderate risk appetite coefficient A = 2.0. What will be the optimal share of HYMKX in Lars' portfolio? Ingrid is two times more risk averse than Lars. What would be Ingrid's optimal share of HYMKX in her complete portfolio? The shares y* for Lars and Ingrid will be
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