ANSWER E PLEASE ONLY Consider the following portfolio choice problem. The investor has initial wealth w and utility u(x) = (x^n) / n. There is a safe asset (such as a US government bond) that has net real return of zero. There is also a risky asset with a random net return that has only two possible returns, R1 with probability 1 − q and R0 with probability q. We assume R1 < 0, R0 > 0. Let A be the amount invested in the risky asset, so that w − A is invested in the safe asset. a) What are risk preferences of this investor, are they risk-averse, riskneutral or risk-loving? b)  Find A as a function of w. c) Does the investor put more or less of his portfolio into the risky asset as his wealth increases? d) Now find the share of wealth, α, invested in the risky asset. How does α change with wealth? e) Calculate relative risk aversion for this investor. How does relative risk aversion depend on wealth?

Consider the following portfolio choice problem. The investor has initial wealth w andutility u(x) = (x^n) /n. There is a safe asset (such as a US government bond) that has netreal return of zero. There is also a risky asset with a random net return that has onlytwo possible returns, R1 with probability 1 − q and R0 with probability q. We assumeR1 < 0, R0 > 0. Let A be the amount invested in the risky asset, so that w − A isinvested in the safe asset.a) What are risk preferences of this investor, are they risk-averse, riskneutral or risk-loving?b) Find A as a function of w.

urgently need

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C, and 30 percent in Stock B? (see attached chart)

Mr Phiri has K10,000 in his account. He is considering investing in a project which has 70 % probability of earning a profit of K10,000 and a 30% probability of incurring a loss of K10,000. His utility at the moment is 20 utiles with the current K10,000. With K20, 000 his utility would be 25 utiles and with K0 his utility would be zero. a) What is the expected profit of the project? b) What is the expected marginal utility of the project? Is Mr Phiri likely to invest in the project? Mr Sinkala also has K10,000 from which he derives 20 utiles. However, Mr Phiri derives 15 utiles from the profit of K10,000. c) What is the expected marginal utility for Mr Sinkala? d) How can you describe Mr Phiri and Mr Sinkala in terms of their attitude towards risk?

please explain clearly

Suppose Grace and Lisa are to go to dinner. Lisa is visiting Grace from outof town, and they are to meet at a local restaurant. When Lisa lived in town,they had two favorite restaurants: Bel Loc Diner and the Corner Stable. Ofcourse, Lisa’s information is out of date, but Grace knows which is betterthese days. Assume that the probability that the Bel Loc Diner is better isp > 1/2 and the probability that the Corner Stable is better is 1 - p. Naturedetermines which restaurant Grace thinks is better. Grace then sends amessage to Lisa, either “Let’s go to the Bel Loc Diner,” “Let’s go to theCorner Stable,” or “I don’t know [which is better].” Lisa receives the message, and then Grace and Lisa simultaneously decide which restaurant to go to. Payoffs are such that Grace and Lisa want to go to the same restaurant, but they prefer it to be the one that Grace thinks is better. More specifically, if, in fact, the Bel Loc Diner is better, then the payoffs from theiractions are as shown in the…

None

Hugo has a concave ubility function of U(W)=√W. His only asset is shares in an Internet start-up company. Tomorrow he will learn the stock's value. He belleves that it is worth $225 with probability 80% and $256 with probability 20%. What is his expected utsty? What risk premium would he pay to avoid bearing this risk? The stock's expected utility (EU) is EU = (Enter a numeric response using a real number rounded to two decimal places.) han fro

Optimal Portfolio: Mean-Variance OptimizationIf you are a portfolio manager who predicted that the tension in Ukraine might spiral into a global economic problem back in December 2021. She decided to construct a portfolio that, she think, would outperform in a war scenario, or in a heightened war risk scenario. Please use the following ETFs:IAU: iShares Gold Trust ETFVDE: Vanguard Energy ETFXLB: Materials Sector SPDR ETFDBC: Invesco DB Commodity Index Tracking FundCQQQ: China Technology Index ETFConstraints:i. Use all ETF products. (Weight of each ETF>= 2% )ii. No ETF is to have more than 40% weight in portfolioObjective: Maximize Expected Return, Minimize volatility, ie. MaximizeSharpe RatioStep 1: Collect historical price/return data for the ETFs over Jan-2018 to Dec-21 period.Step 2: Assume the Average Historical Return is the Expected Return for each asset (strong assumption) and Historical Volatility is the Expected Volatility (strong assumption).Step 3: Present the var-cov…