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Proportion of stocks in investor

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Suppose the optimal risky portfolio consists of 0.62 stocks and the rest are in bonds. It has an expected return of 0.11 and standard deviation of 0.27. If an investor has a risk-aversion of 7, then what is the proportion of stocks in this investor's optimal complete portfolio? Assume that the risk-free rate is 0.02.

Reference no: EM132255624

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