Assume that the risky portfoliorsquos return is 95 and its, Ask an Expert

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Assume that the Risky Portfolio’s return is 9.5% and its std. deviation is 13%. If the Risk Free rate is 2%, and your risk aversion A=4.5, what would be the optimal allocation between the Risky Portfolio and TBills? How would reductions in the Risk Aversion or increases in the TBill rate alter the findings? (Show your calculations, then discuss the implications of changes in 1-2 paragraphs).

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Financial Management, Finance

Category:- Financial Management
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