Assume that the expected return on stocks is 12 the

Reference no: EM13623584

Assume that the expected return on stocks is 12%, the standard deviation of stocks is 18%, and the riskfree rate is 5%. Given this information, an investor selects a portfolio with a 70% allocation to stocks and a 30% allocation to the riskfree asset. According to the derivation of risk tolerance found in Equation (17.2), what risk tolerance is indicated by this choice?

Reference no: EM13623584

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