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Exhibit 16 -Refer to Exhibit 16

question 34

Multiple Choice

Exhibit 16.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
A portfolio manager is trying to establish a strategic asset allocation for two different clients, Bob Bowman and Tom Luck. Bob Bowman has a risk tolerance factor of 22 and Tom Luck has a risk tolerance factor of 6. The characteristics of the three model portfolios under consideration are provided in the table below.  Asset Mix Expected Portfolio  Stock  Bond  Return  Variance  A 0.750.250.120.45 B 0.40.60.080.16 C 0.30.70.050.06\begin{array}{ccccc}&\text { Asset Mix}&&\text { Expected}\\\text { Portfolio } & \text { Stock } & \text { Bond } & \text { Return } & \text { Variance } \\\hline \text { A } & 0.75 & 0.25 & 0.12 & 0.45 \\\text { B } & 0.4 & 0.6 & 0.08 & 0.16 \\\text { C } & 0.3 & 0.7 & 0.05 & 0.06\end{array}
-Refer to Exhibit 16.1. The expected utilities of Portfolios A, B and C for Bob Bowman are

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Definitions:

Eccentricity

The quality of being unconventional or slightly strange in behavior or appearance.

Schizotypal

A personality disorder characterized by severe social anxiety, thought disorder, paranoid ideation, derealization, transient psychosis, and often unconventional beliefs.

Paranoid Personality

A mental health condition characterized by a pervasive distrust and suspicion of others' motives.

Genetic Link

The association between genetic factors and the likelihood of developing certain conditions or traits.

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