【正文】 isky portfolio and the riskfree asset?A portfolio that pays 12% with 60% probability or 5% with 40% probability.D.A portfolio that pays 10% with a 60% probability or 5% with 40% probability.B. 10% 10%D. 15%C. 20%B.A.9.Assume an investor with the following utility function: U = E(r) 3/2(s2).To maximize her expected utility, she would choose the asset with an expected rate of return of _______ and a standard deviation of ________, respectively.The investor39。s tendency to make risky or conservative choicesD.s degree of financial securityC.s prior investing experienceB.A.s risk tolerance, which factor would they be least likely to assess?Cannot be determinedfor the same risk, Elias requires a lower rate of return than David.D.for the same risk, David requires a higher rate of return than Elias.B.None of the optionsI and IV onlyD.I and II onlyB.6.In a returnstandard deviation space, which of the following statements is(are) true for riskaverse investors? (The vertical and horizontal lines are referred to as the expected returnaxis and the standard deviationaxis, respectively.)I) An investor39。It connects portfolios that offer increasing utilities according to returns and standard deviations.E.It is the locus of portfolios that have the same standard deviations and different rates of return.C.A.5.In the meanstandard deviation graph, which one of the following statements is true regarding the indifference curve of a riskaverse investor?verticalE.zeroC.A.4.In the meanstandard deviation graph an indifference curve has a ________ slope.II and III onlyE.II onlyC.A.3.Which of the following statements is(are) false?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 and III onlyE.II onlyC.A.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.They are willing to accept lower returns and high risk.E.They accept investments that are fair games.C.A.1.Which of the following statements regarding riskaverse investors is true?Chapter 06Capital Allocation to Risky AssetsMultiple Choice QuestionsThey only care about the rate of return.B.They only accept risky investments that offer risk premiums over the riskfree rate.D.They only care about the rate of return, and they accept investments that are fair games.I onlyB.I and II onlyD.II, III, and IV onlyI onlyB.I and II onlyD.III and IV onlynegativeB.positiveD.cannot be determinedIt is the locus of portfolios that have the same expected rates of return and different standard deviations.B.It is the locus of portfolios that offer the same utility according to returns and standard deviations.D.None of the optionss own indifference curves might intersect.II) Indifference curves have negative slopes.III) In a set of indifference curves, the highest offers the greatest utility.IV) Indifference curves of two investors might intersect.A.II and III onlyC.III and IV onlyE.7.Elias is a riskaverse investor. David is a less riskaverse investor than Elias. Therefore,A.for the same return, Elias tolerates higher risk than David.C.for the same return, David tolerates higher risk than Elias.E.8.When an investment advisor attempts to determine an investor39。The investor39。The investor39。The investor39。The level of return the investor prefersE.s feelings about loss12%。10%。10%。8%。10.Assume an investor with the following utility function: U = E(r) 3/2(s2).To maximize her expected utility, which one of the following investment alternatives would she choose?A.A portfolio that pays 10% with 40% probability or 5% with a 60% probability.C.A portfolio that pays 12% with 40% probability or 5% with 60% probability.5B.7D.12.According to the meanvariance criterion, which one of the following investments dominates all others?A. Variance = B. Variance = C. Variance = D. Variance = E.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?A. Standard deviation = B. Standard deviation = C. Standard deviation = D. Standard deviation = E. Standard deviation = 1B.3D.Cannot tell from the information given1B.3D.Cannot tell from the information giveninvestor39。investor39。certaintyequivalent rate of the portfolio.D.17.The exact indifference curves of different investorsA.can be calculated precisely with the use of advanced calculus.C.cannot be known with perfect certainty and although not known with perfect certainty, do allow the advisor to create more suitable portfolios for the client.should be considered for the asset in isolation.B.should be bined with the riskiness of other individual assets in the proportions these assets constitute the entire portfolio.D.19.A fair gameA.is a risky investment with a zero risk premium.C.will not be undertaken by