9. The variable (A) in the utility formula represents the:
a. investor’s return requirement.
b. investor’s aversion to risk.
c. certainty equivalent rate of the portfolio.
d. preference for one unit of return per four units of risk.
d. preference for one unit of return per four units of risk.
Or more simply put, it represents the investor's desire for a balanced ratio of return and risk. Now let me tell you a joke: Why did the scarecrow win an award? Because he was outstanding in his field!