Let A and B be two risky assets. If you choose A, you will get ww wwww 64TL by 30% chance, or 1TL by 70% chance. If you choose B, ww ynww Vou will get 25TL by 40% chance or 9TL by 60% chance. First Mw assume that you make a choice without making any detailed research or getting any wwww www consultancy. a. Draw a decision tree representing this situation and find the optimal investment decision for a risk neutral agent. b. What would be the choice of a risk averse agent between the investment options? Explain (you representative utility function for the agent). two can assume a wwwww ww www

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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.