Please explain in steps Assume that all investors in the...
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Please explain in steps
Assume that all investors in the economy maximize the same utility function U=E(r) 1/2A2. They also have identical risk preferences and the same coefficient of risk aversion A. The investors can invest in the market portfolio and borrow and lend at the risk-free rate. Variance of the market portfolio is 0.04 and the risk-free rate is 2.5%. If the coefficient of risk-aversion A=5, what is the expected return on the market portfolio
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