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Suppose the risky return A with expected return equal to 11.4% and variance equal to...

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Suppose the risky return A with expected return equal to 11.4% and variance equal to 0.04 can be mixed with the risk-free asset that offers a risk-free rate of 5%. All of my students have a utility function of the following form: U = E(r) 2.A.02 1. Alex has a coefficient of risk aversion equal to 2. What is the expected return and the standard deviation of his optimal complete portfolio? 2. Ian has a coefficient of risk aversion equal to 4. What is the expected return and the standard deviation of his optimal complete portfolio? 3. Estimate the expected return and the standard deviation of optimal complete portfolios in (1) and (2), if the utility function of Alex and Ian is U = 2.E(r) A.o?, instead. =

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