as the chief investment officer for a money management firm specializing in taxable individual investors, you are trying to establish a strategic asset allocation for two different clients. You have...


as the chief investment officer for a money management firm specializing in taxable individual investors, you are trying to establish a strategic asset allocation for two different clients. You have established that Ms. A has a risk-tolerance factor of 9, while Mr. B has a risk-tolerance factor of 27. The characteristics for four model portfolios follow:

















































ASSET MIX

Portfolio

Stock


bond

ER

σ2


19%91%8%5%
2217999
369311014
484161124




  1. Calculate the expected utility of each prospective portfolio for each of the two clients. Do not round intermediate calculations. Round your answers to two decimal places.
































    Portfolio

    Ms. A

    Mr. B
    1
    2
    3
    4




Jun 02, 2022
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