1. A person who prefers getting $20,000 for sure over a lottery where he will receive $60,000 if a coin lands heads and lose $20,000 if it lands tails is called ________________________.

(choice set: risk lover, risk neutral, risk averse)

2. An investor invests 30% of her wealth in a risky asset with an expected rate of return of 0.15 and a variance of 0.12 and 70% in a treasury bill that pays a return of 0.06. Her portfolio's expected rate of return and standard deviation are __________ and __________ respectively.

3. A portfolio is comprised of two stocks, A and B. Stock A has a standard deviation of return of 5% while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is 0.18. Stock A comprises 40% of the portfolio while stock B comprises 60% of the portfolio. The variance of return on the portfolio is __________.

4. The standard deviation of return on investment A is 0.15 while the standard deviation of return on investment B is 0.04. If the correlation coefficient between the returns on A and B is -0.30, the covariance of returns on A and B is __________. Show all work!