Expected return and standard of a risky portfolio are 11% and 21% respectively. Risk-free rate is 5%. Mr. Yen constructed a complete portfolio with these two assets, which maximises his utility. If the standard deviation of his complete portfolio is 15.75%, what is the value of Mr. Yen’s risk aversion coefficient? (You must show all necessary workings)

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Q: please give me answer in relatable

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Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.