Estimated that the expected return of Xyon stock

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1. You are a financial advisor and you have estimated that the expected return of Xyon stock is 10% with a standard deviation of 16%. A stock from the same industry, Yane, has a 90% chance of returning a profit of 10% and a 10% chance of losing 20%.

Mr. Harrison, has a risk aversion coefficient, A, of 5. Should he invest in Xyon or in T-bills which currently return 3%?

Reference no: EM132058717

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