The information contained in the table below shows the expected return and standard deviation for the market and Treasury Bills. Market Data Rate of Return Standard Deviation Treasury Bills 4.25% 0.00% S&P 500 12.00% 21.00% Required: Using the information in the table above and the varying risk aversions below, please calculate allocations to the risky and risk-free assets. (Use cells A5 to C6 from the given information to complete this question.) Risk Aversion Percent Allocated to the Market (S&P 500) Percent Allocated to Treasury Bills 4.00 2.00 1.50

The information contained in the table below shows the expected return and standard deviation for the market and Treasury Bills. Market Data Rate of Return Standard Deviation Treasury Bills 4.25% 0.00% S&P 500 12.00% 21.00% Required: Using the information in the table above and the varying risk aversions below, please calculate allocations to the risky and risk-free assets. (Use cells A5 to C6 from the given information to complete this question.) Risk Aversion Percent Allocated to the Market (S&P 500) Percent Allocated to Treasury Bills 4.00 2.00 1.50

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 8MC

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The information contained in the table below shows the expected return and standard deviation for the market and Treasury Bills.

Market Data	Rate of Return	Standard Deviation
Treasury Bills	4.25%	0.00%
S&P 500	12.00%	21.00%

Required:
Using the information in the table above and the varying risk aversions below, please calculate allocations to the risky and risk-free assets.

(Use cells A5 to C6 from the given information to complete this question.)

Risk Aversion	Percent Allocated to the Market (S&P 500)	Percent Allocated to Treasury Bills
4.00
2.00
1.50