Assume an Investor with the Following Utility Function: U =

question 3

Multiple Choice

Assume an investor with the following utility function: U = E(r) - 3/2(s²) .To maximize her expected utility,she would choose the asset with an expected rate of return of _______ and a standard deviation of ________,respectively

• A) 12%;20%
• B) 10%;15%
• C) 10%;10%
• D) 8%;10%
• E) none of these

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Definitions:

Entrepreneurial Venture

A new business or startup that is initiated by an entrepreneur with the aim of seeking innovation, growth, and profit.

Entrepreneurs

Individuals who create, organize, and manage a new business or enterprise, taking on greater than normal financial risks in order to do so.

Administrators

Individuals responsible for the management and operation of organizations or systems, overseeing the implementation of policies and achievement of objectives.

Manager

An individual responsible for planning, directing, and overseeing the operations and fiscal health of a business unit, department, or an organization.