15. (0.2 point) The "father" of modern portfolio theory is: (a) Markowitz. (6) Friedman (c) Samuelson. (d) Sharpe. 16. (0.2 point) To describe the random variable of the portfolio rate or return, the investor needs (a) mean and coefficient of correlation. (b) median and standard deviation (c) only the expected value. (d) expected value and standard deviation. 17. (0.2 point) Portfolio A has an expected return of 16% with a standard deviation of 8%. Portfolio B has an expected return of 12% with a standard deviation of 7%. (a) Portfolio A has a lower risk/return. (b) Portfolio B has a larger expected terminal wealth. (c) The portfolios have the same risk/return. (d) Portfolio B has a more certain return. 18. (0.2 point) For an investor's indifference curve (a) each portfolio on the curve has the same standard deviation. (b) all portfolios on the curve are equally desirable. (c) he will choose the portfolio where his set of curves intersect. (d) he will prefer a portfolio that lies to the southeast" of the curve. 19. (0.2 point) The development of an investor's indifference curves is based on (a) cognitive psychology. (b) correlation theory. (c) economic theory. (d) utility theory. (e) probability theory. 20. (0.2 point) Modern Portfolio Theory assumes investors are (a) risk averse. (b) risk seekers. (c) not concerned with risk. (d) risk neutral. 21. (0.2 point) Assuming investor non-satiation, an investor (a) will choose the portfolio with the lowest risk. (b) will choose the portfolio with the highest return for a given level of risk. (c) is risk neutral (d) is risk-seeking