The Certainty Equivalent Rate of a Portfolio Is

question 37

Multiple Choice

The certainty equivalent rate of a portfolio is

• A)the rate that a risk-free investment would need to offer with certainty to be considered equally attractive as the risky portfolio.
• B)the rate that the investor must earn for certain to give up the use of his money.
• C)the minimum rate guaranteed by institutions such as banks.
• D)the rate that equates "A" in the utility function with the average risk aversion coefficient for all risk-averse investors.

---

Definitions:

Basophils

A type of white blood cell involved in immune responses, particularly known for releasing histamine and playing a role in allergic reactions.

Eosinophils

A type of white blood cell involved in the body's immune response, particularly known for their role in fighting parasitic infections and contributing to allergic reactions.

Monocytes

A type of white blood cell that plays a significant role in the immune response by differentiating into macrophages and dendritic cells.

Lymphocytes

A type of white blood cell that is an essential part of the immune system, with roles in both the innate and adaptive immune responses.