Explain to him whether buying cocacola on a 50 margin or


Jimmy argues that he can make more money if he borrows money to invest in CocaCola at a margin of 50%. Jimmy's utility function is UF= E(r) -½AFσ^2, AF= 2. Jimmy can borrow at 0% per month. Also assume that Jimmy will not face any margin calls. Given that CocaCola has a Arithmetic Average of 0.6% and a Standard Deviation of 7.70%, explain to him whether buying CocaCola on a 50% margin, or investing without borrowing is a better strategy based on his utility function.

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Financial Management: Explain to him whether buying cocacola on a 50 margin or
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