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What is degree of risk aversion

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Your financial advisor forecasts that the return of the S&P 500 Index Portfolio over the next year will be 12%.  According to her estimates, the expected return for a one-year Treasury Bill is 4%. Based on recent performance, she estimates that the standard deviation of returns for the S&P 500 Index Portfolio will be 25%.

Assuming that you choose to invest in the S&P 500 Index Portfolio, what is your degree of risk aversion?

Reference no: EM131865815

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