Assume an Investor with the Following Utility Function: U =

question 33

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%

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Definitions:

Tight-Knit

Closely integrated and bound together, describing a group of people who are closely connected emotionally and support each other.

Mutual Support

A form of help and assistance shared between individuals or groups, often to achieve common goals or overcome similar problems.

Respite Care

Short-term, temporary care provided to individuals needing assistance, offering relief for their usual caregivers.

Social Worker

A professional dedicated to helping individuals, families, and groups improve their well-being and address social and personal challenges.