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

question 65

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.
Based on the utility function above, which investment would you select?

• A) 1
• B) 2
• C) 3
• D) 4
• E) Cannot be determined from the information given.

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