【正文】 They accept investments that are fair games.C.1.Which of the following statements regarding riskaverse investors is true?72.Describe how an investor may bine a riskfree asset and one risky asset in order to obtain the optimal portfolio for that investor.70.Toby and Hannah are two riskaverse investors. Toby is more riskaverse than Hannah. Draw one indifference curve for Toby and one indifference curve for Hannah on the same graph. Show how these curves illustrate their relative levels of risk aversion.69.Draw graphs that represent indifference curves for the following investors: Harry, who is a riskaverse investor。Short Answer Questions.D.borrowing $46 at the riskfree rate and investing the total amount ($146) in the risky asset.D.% and %D.% and %D..D.60% and 40%D.% and %D..D.60% and 40%D.% and %D.。I, II, and IIIE.A.change the standard deviation of the portfolio and find the expected return the investor would require to maintain the same utility level.E.A.16%, 10%, 14%E.A.E(rC) = + Standard Deviation of CD.50.Your client, Bo Regard, holds a plete portfolio that consists of a portfolio of risky assets (P) and TBills. The information below refers to these assets.%C.s plete portfolio?%%B.What is the expected return on Bo39。the inflation uncertainty over their time to maturity is negligible and their term to maturity is identical to most investors39。the inflation uncertainty over their time to maturity is negligible.C.47.Treasury bills are monly viewed as riskfree assets becausethe capital allocation line.C.46.In the meanstandard deviation graph, the line that connects the riskfree rate and the optimal risky portfolio, P, is calledthe decision as to the allocation among different risky assets.C.45.Asset allocation may involveinvestors will hold varying amounts of the risky asset in their portfolios.B.identifying market anomalies.A.s risk tolerance decreasing.D.A.assessing the effects of inflation.E.A. $514。$378。 $54C.A. $160E. $240C.A. E. 。A. E. C.A.The set of portfolios formed with the Tbill and security D.E.A. Variance = Security C: E(r) = 。.E.A.investing $43 in the risky asset and $57 in the riskless asset.E.A.40% and 60%E.A.57% and 43%E.A.。 E. C.A. C.A.None of the options。28.An investor invests 30% of his wealth in a risky asset with an expected rate of return of and a variance of and 70% in a Tbill that pays 6%. His portfolio39。maximizes her risk.C.s optimal portfolio is the portfolio thatThe slope of the CAL equals the increase in the expected return of the plete portfolio per unit of additional standard deviation.C.26.Which of the following statements regarding the capital allocation line (CAL) is false?investment opportunity set formed with a risky asset and a riskfree asset.B.II and IVI and VB.s indifference curves will be downward sloping and Edie39。s.III) Steve39。24.Steve is more riskaverse than Edie. On a graph that shows Steve and Edie39。Investment B dominates investment C.C.the rate that equates A in the utility function with the average risk aversion coefficient for all riskaverse investors.E.A.will increase as the variance increases.E.A.final wealth will be greater than initial wealth.E.A.will not be undertaken by a riskaverse investor and is a risky investment with a zero risk premium.E.A.should be bined with the riskiness of other individual assets in the proportions these assets constitute the entire portfolio.D.can be calculated precisely with the use of advanced calculus.C.17.The exact indifference curves of different investorsinvestor39。Cannot tell from the information given1B.3D. Standard deviation = Standard deviation = D. Standard deviation = B.13.Consider a risky portfolio, A, with an expected rate of return of and a standard deviation of , that lies on a given indifference curve. Which one of the following portfolios might lie on the same indifference curve? Variance = D. Variance = B.12.According to the meanvariance criterion, which one of the following investments dominates all others?5B.A portfolio that pays 12% with 40% probability or 5% with 60% probability.A.8%。10%。The level of return the investor prefersE.The investor39。for the same return, David tolerates higher risk than Elias.E.A.III and IV onlyE.A.None of the optionsIt is the locus of portfolios that have the same expected rates of return and different standard deviations.B.cannot be determinednegativeB.III and IV onlyI onlyB.II, III, and IV onlyI onlyB.They only care about the rate of return, and they accept investments that are fair games.They only care about the rate of return.B.Multiple Choice Questions1.Which of the following statements regarding riskaverse investors is true?They accept investments that are fair games.C.2.Which of the following statements is(are) true?I) Riskaverse investors reject investments that are fair games.II) Riskneutral investors judge risky investments only by the expected returns.III) Riskaverse investors judge investments only by their riskiness.IV) Riskloving investors will not engage in fair games.II onlyC.3.Which of the following statements is(are) false?I) Riskaverse investors reject investments