Mary has access to risky stocks A and B. But she has no access to risk-free...

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Mary has access to risky stocks A and B. But she has no access to risk-free T-bills. The two assets have the following charac

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Answer 1

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Expected Return on niset A = 12,05% Expected seturn on and = $%. correlatein coefficient (enel = 0.10 Sola) = 14% - Only Sola Expected Retrarn - Expected Retom a w on Asset A Expected Retom on Asset B xwe 0.05 x 0.79 = 0.125 x0.21 + = 0.0657 Retrarn o

(D) If coefficient of risk aversion is 6 instead of 3 which leads to increase in Mary's utility on returns but on change in answer of part (a)

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Answer 2

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