Find what share do allocate to the risky investment

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Reference no: EM13238243

You are considering dividing an investment portfolio between a risk-free investment with a return equal to 5% and a risky investment with a mean return of 12% and a variance σ2=30. Your coefficient of risk aversion is 0.4

Using calculus what share of your portfolio do you optimally allocate to the safe investment and what share do you allocate to the risky investment?

Reference no: EM13238243

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