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Assume an Investor with the Following Utility Function: U =

Question 3

Multiple Choice

Assume an investor with the following utility function: U = E(r) - 3/2(s2) .To maximize her expected utility,she would choose the asset with an expected rate of return of _______ and a standard deviation of ________,respectively


A) 12%;20%
B) 10%;15%
C) 10%;10%
D) 8%;10%
E) none of these

Correct Answer:

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