1. An investor faces four investment choices: Investment Expected return Standard deviation 1 0.12 0.30 2 0.15 0.50 3 0.21 0.16 4 0.24 0.21 1) Using the quadratic utility function learned in class, which investment would you select if you were risk averse with A = 4? 2) Which investment would you select if you were risk neutral? 3) The variable (A) in the utility function represents the: a. Investor's return requirement. b. Investor's aversion to risk. c. Certainty equivalent rate of the portfolio. d. Preference for one unit of return per four units of risk. 1. An investor faces four investment choices: Investment Expected return Standard deviation 1 0.12 0.30 2 0.15 0.50 3 0.21 0.16 4 0.24 0.21 1) Using the quadratic utility function learned in class, which investment would you select if you were risk averse with A = 4? 2) Which investment would you select if you were risk neutral? 3) The variable (A) in the utility function represents the: a. Investor's return requirement. b. Investor's aversion to risk. c. Certainty equivalent rate of the portfolio. d. Preference for one unit of return per four units of risk