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  1. business
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  3. consider historical data showing that the average

Consider historical data showing that the average annual rate of return on the S&P...

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Accounting

Consider historical data showing that the average annual rate of return on
the S&P 500 portfolio over the past 95 years has averaged roughly 8%
more than the Treasury bill return and that the S&P 500 standard deviation
has been about 20% per year. Assume these values are representative of
investors' expectations for future performance and that the current T-bill
rate is 2%.
Calculate the utility levels of each portfolio for an investor with A=2.
Assume the utility function is U=E(r)-0.5A2.
Note: Do not round intermediate calculations. Round your answers to 4
decimal places.
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