To Build an Indifference Curve, We Can First Find the Utility

question 47

Multiple Choice

To build an indifference curve, we can first find the utility of a portfolio with 100% in the risk-free asset, then

• A) find the utility of a portfolio with 0% in the risk-free asset.
• B) change the expected return of the portfolio and equate the utility to the standard deviation.
• C) find another utility level with 0% risk.
• D) change the standard deviation of the portfolio and find the expected return the investor would require to maintain the same utility level.
• E) change the risk-free rate and find the utility level that results in the same standard deviation.

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Definitions:

Adjusting Entry

An accounting record created at the conclusion of a fiscal period to distribute revenues and expenses to the period they truly belong to.

Physical Inventory

A process of counting and verifying the actual quantities of inventory on hand, typically conducted at the end of an accounting period.

FOB Destination

A shipping term indicating that the seller is responsible for the goods and the cost of shipping until they are delivered to the buyer's specified location.

Physical Inventory

The process of counting and verifying all the physical goods and merchandise a company has in stock at a particular time.