in Asset allocation we multiply risk aversion score and variance with 0.005

in equity we don’t multiply with 0.005.

is equity one incorrect? Equation 2 in reading 24

Thanks,

in Asset allocation we multiply risk aversion score and variance with 0.005

in equity we don’t multiply with 0.005.

is equity one incorrect? Equation 2 in reading 24

Thanks,

λA = the investor’s trade-off between active risk and active return; measures risk aversion = in active risk terms = 0.005* R(A) Both are correct.

got it… thanks!

You are welcome.