According the CFA Level I:
Utility function is below:
U=E(r)−1/2 * A * σ^ 2
where, U is the utility of an investment, E(r) is the expected return, and σ^2 is the variance of the investment. A is a measure of risk aversion
Indifference curve plots the combinations of risk–return pairs that an investor would accept to maintain a given level of utility.
My understanding is: the function is: E(r_p) = U + 1/2 * A * σ^ 2
And the curve is supposed to be symmetric along the y-axis. (σ is independent variable and E(r_p) is dependent variable)
however, according to the exhibit 17 (as attached pic), the indifference curve is not symmetric along y axis, is my understanding wrong or the chart is inaccurate?
