Top Posters
Since Sunday
1
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
corie corie
wrote...
Go to Answer
Posts: 767
Rep: 10 0
6 years ago
Mel and Christy are co-workers with different risk attitudes.  Both have investments in the stock market and hold U.S. Treasury securities (which provide the risk free rate of return).  Mel's marginal rate of substitution of return for risk (  / MU RP, σP)  is   =   where RP is the individual's portfolio rate of return and σP is the individual's portfolio risk.  Christy's
  =  .  Each co-worker's budget constraint is RP = RF +   σP,  where Rj  is the risk-free rate of return, Rm is the stock market rate of return, and σm  is the stock market risk.  Solve for each co-worker's optimal portfolio rate of return as a function of  Rj, Rm, and σm.
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
Read 57 times
1 Reply
Replies
Answer verified by a subject expert
boransalboransal
wrote...
#1
Posts: 477
Rep: 13 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 110 words.
1

Related Topics

corie Author
wrote...

6 years ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
SupremeDJ
wrote...

Yesterday
this is exactly what I needed
bbbbbbbh
wrote...

2 hours ago
Just got PERFECT on my quiz
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1035 People Browsing
 116 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 179
  
 428
  
 220
Your Opinion
What's your favorite math subject?
Votes: 315
Previous poll results: Who will win the 2024 president election?