A friend comes to you seeking your advice on selecting a fund that is offered in his 401k plan. You boil it down to three funds that by your analysis are mean-variance efficient. Their returns and standard deviations, respectively, are expected to be X: 8% and 9.75%, Y: 10% and 14%, and Z: 12% and 19%. Based on a survey designed to assess the risk-aversion factor to be used in the CFA Institute utility function, your friend’s A value is determined to be 2. Your recommendation should be that the investor select fund ______.
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