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EC311 · Intermediate Microeconomics

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EC311 / TOPIC 18

5.5 Optimal risky-asset holdings

One idea · follow the reasoning · then practise1 / 9

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What risky share is optimal given return and risk aversion?

Two clocks, rising stacks of coins, and a balance holding a bank building and a blue geometric object
VISUAL NOTE · Time and risk Choose how much risk, not merely whether to take it

Knowing diversification helps, what fraction should an investor allocate to risk?