Use the Below Information to Answer the Following Question

question 26

Multiple Choice

Use the below information to answer the following question. U=E(r) - (A/2) s²,whereA= 4.0.
The variable (A) in the utility function represents the

• A)investor's return requirement.
• B)investor's aversion to risk.
• C)certainty-equivalent rate of the portfolio.
• D)minimum required utility of the portfolio.

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Definitions:

Primary Drives

Innate biological necessities like hunger and thirst that drive behavior and are essential for survival.

Motives

The internal drives that propel individuals to take action towards achieving goals.

Primary Drives

Basic physiological needs such as hunger, thirst, and sexual desire that motivate behavior.

Intensity

The measurable amount of a property, such as force, brightness, or a magnetic field.