The utility function of an investor is u r - asigma2 the, Ask an Expert

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The utility function of an investor is U = r - Aσ². The risk free rate is 5%. The risky portfolio has an expected return of 13% and standard deviation of 25%.

What is the maximum risk aversion coefficient A to make the investors prefer the risky portfolio than the risk free asset?

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Category:- Financial Management
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