Use the Below Information to Answer the Following Question U = E(r) ? (A/2)s², Where a = 4

question 21

Multiple Choice

Use the below information to answer the following question. $\begin{array}{llcc}\text { Investment } &\text { Expected Return } E(r) &\text { Standard Deviation }\\1&0.12&0.13\\2&0.15&0.15\\3&0.21&0.16\\4&0.24&0.21\\\end{array}$

U = E(r) ? (A/2) s², where A = 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:

Inductive Reactance

The opposition that an inductor presents to alternating current, due to the inductor's ability to store energy as a magnetic field.

Inductor

A passive electronic component that stores energy in its magnetic field.

Inductance

The property of a conductor by which a change in current in the conductor induces an electromotive force in both the conductor itself and in any nearby conductors by mutual inductance.

Hz

The unit of frequency in the International System of Units (SI), denoting the number of cycles per second.