I’m just confirming here but these utility graphs are not total utility right? For example, utility at risk aversion 2 here (the last curved line), the maximum utility is not at the peak of the utility line right? I’m assuming we just are looking for an E( R ) and std combination in this graph where the utility would be highest and this does not necessarily equate to where the utility graph peaks. It could be anywhere along the curved line right?
I’m assuming the peak of the utility graph is where the maximum E( R ) – which looks around expected return of 5.25 but this does not mean where the highest utility. Is that right?