# Maximum Level of Risk aversion

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Consider a portfolio that offers an expected rate of return of 12% and a standard deviation of 18%. T-bills offer a risk free 7 % rate of return. What is the maximum level of risk aversion for which the risky portfolio is still preferred to t-bills?

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The expert determines the maximum level of risk aversion for which the risky portfolio is still preferred to t-bills. A Complete, Neat and Step-by-step Solution is provided in the attached file.

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Consider a portfolio that offers an expected rate of return of 12% and a standard deviation of 18%. T-bills offer a risk free 7 % rate ...

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