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Calculate optimal weight allocation into the risk free asset

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Reference no: EM132973057

Problem 1: In order to construct an optimal portfolio which maximises a client's utility scores, discuss which risky asset, either a FTSE100 index tracking portfolio or your individually chosen share from question 3, should be used to mix with a risk free asset. If your client risk aversion degree A is 2 and the risk free rate of return is assumed to be 0.1% a year, calculate the optimal weight allocation into the risk free asset for this client.

Reference no: EM132973057

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