12. The minimum return an investor expects to earn for being willing to forego consumption today is the:

A) risk-free rate.

B) risk premium.

C) real rate.

13. Two assets, Q & R, each have a standard deviation of 8.5%. Asset Q's expected return is 12% and Asset R's expected return is 13.5%. A rational investor will choose:

A) Asset R.

B) either Asset Q or Asset R.

C) Asset Q.