Suppose that the borrowing rate that your client faces is 11%. Assume that the S&P 500...

Suppose that the borrowing rate that your client faces is 11%. Assume that the S&P 500 index has an expected return of 15% and standard deviation of 32%, that r_f = 3%.

What is the range of risk aversion for which a client will neither borrow nor lend, that is, for which y = 1? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

y = 1 for

________ ≤ A ≤ __________

Expert Solution

jeff jeffy answered 7 hours ago

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