Exhibit 15.1
Use the Information Below for the Following Problem(S)
A portfolio manager is trying to establish a strategic asset allocation for two different clients, Bob Bowman and Tom Luck. Bob Bowman has a risk tolerance factor of 22 and Tom Luck has a risk tolerance factor of 6. The characteristics of the three model portfolios under consideration are provided in the table below.
$\begin{array}{c}
\begin{array}{lll}
\text{Asset Mix}
\end{array}
\begin{array}{lll}
&&&
\end{array}
\begin{array}{lll}
Expecterd
\end{array}
\end{array}$
$\begin{array}{cllcc}
\text { Portfolio } & \text { Stock } & \text { Aond } & \begin{array}{c}
\
\text { Return }
\end{array} & \text { Variance } \
\hline \text { A } & 0.75 & 0.25 & 0.12 & 0.45 \
\text { B } & 0.4 & 0.6 & 0.08 & 0.16 \
\text { C } & 0 . & 0.7 & 0.05 & 0.66
\end{array}$
-Refer to Exhibit 15.1.The expected utilities of Portfolios A,B and C for Tom Luck are

Question

Exhibit 15.1
Use the Information Below for the Following Problem(S)
A portfolio manager is trying to establish a strategic asset allocation for two different clients, Bob Bowman and Tom Luck. Bob Bowman has a risk tolerance factor of 22 and Tom Luck has a risk tolerance factor of 6. The characteristics of the three model portfolios under consideration are provided in the table below.
                               $\begin{array}{c}
\begin{array}{lll}
\text{Asset Mix}
\end{array}
\begin{array}{lll}
&&&
\end{array}
\begin{array}{lll}
Expecterd
\end{array}
\end{array}$
$\begin{array}{cllcc}
\text { Portfolio } & \text { Stock } & \text { Aond } & \begin{array}{c}
 \
\text { Return }
\end{array} & \text { Variance } \
\hline \text { A } & 0.75 & 0.25 & 0.12 & 0.45 \
\text { B } & 0.4 & 0.6 & 0.08 & 0.16 \
\text { C } & 0 . & 0.7 & 0.05 & 0.66
\end{array}$
-Refer to Exhibit 15.1.The expected utilities of Portfolios A,B and C for Tom Luck are

Quizplus · Accepted Answer

The Answer of Exhibit 15.1
Use the Information Below for the Following Problem(S)
A portfolio manager is trying to establish a strategic asset allocation for two different clients, Bob Bowman and Tom Luck. Bob Bowman has a risk tolerance factor of 22 and Tom Luck has a risk tolerance factor of 6. The characteristics of the three model portfolios under consideration are provided in the table below.
                               $\begin{array}{c}
\begin{array}{lll}
\text{Asset Mix}
\end{array}
\begin{array}{lll}
&&&
\end{array}
\begin{array}{lll}
Expecterd
\end{array}
\end{array}$
$\begin{array}{cllcc}
\text { Portfolio } & \text { Stock } & \text { Aond } & \begin{array}{c}
 \
\text { Return }
\end{array} & \text { Variance } \
\hline \text { A } & 0.75 & 0.25 & 0.12 & 0.45 \
\text { B } & 0.4 & 0.6 & 0.08 & 0.16 \
\text { C } & 0 . & 0.7 & 0.05 & 0.66
\end{array}$
-Refer to Exhibit 15.1.The expected utilities of Portfolios A,B and C for Tom Luck are

Exhibit 15 -Refer to Exhibit 15