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Finance Assignment | Top Essay Writing

6. Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 20% per year.
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Assume these values are representative of investors’ expectations for future performance and that the current T-bill rate is 5%. Calculate the utility levels of each portfolio for an investor with A = 2. Assume the utility function is U = E(r) – 0.5 x Ao2. Redo the same for an investor with A = 3. Which portfolio does each investor prefer? U (A=2) U (A=3) Windex 1.0 0.8 WBills 0.0 0.2 0.4 0.6 0.8 0.6 0.4 0.2 1.0 0.0. Get Finance homework help today

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