A portfolio has an expected return of 20% and standard deviation of 30%. T-bills offer a safe rate of return of 7%. If an investor has a risk aversion parameter A = -4 prefer to invest in T-bills or the risky portfolio ? Calculate the utility for the risky portfolio and the risk free asset respectively. Select one: a. 16% and 9% ob. 20% and 7% O c. 12% and 8% d. 23% and 7% e. 45% and 7%
