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4

I'm afraid you got confused a bit about economic meaning of discounting. It actually takes into account the interest payments. The economic logic is following: 8% interest rate on deposit makes your $1$ today equal $1.08$ dollars in 1 year. When you calculate NPV, you basically convert future dollars into today dollars. You know rate of conversion because ...


2

This seems to be specific to the CFA exam and is a badly formulated question. First, an indifference curve for some fixed utility level can be viewed as a function mapping $\sigma$ to $\mu$. At any value of $\sigma$, this function has a slope (which is given by $\sigma A$). No economist would call this a "slope coefficient" in this context, as this ...


2

It would seem that both options are correct given the specific mean-variance utility function. Use $\mu$ to denote the expected value. In the $(\sigma,\mu)$-plain, an indifference curve representing a particular utility level $\overline U$ is given by \begin{equation} \overline U=\mu-\frac12 A\sigma^2. \end{equation} Applying implicit differentiation, we can ...


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