4. Stocks A, B, and C have the same standard deviation. The following table shows the correlations between the returns on these stocks. (note that correlation with itself is always 1). Stock A Stock B Stock C Stock A Stock B Stock C 1.0 -0.4 0.9 1.0 0.1 1.0 Given these correlations, consider the following portfolios: (1) Equally invested in stocks A and B. (2) Equally invested in stocks A and C. (3) Equally invested in stocks B and C. (4) Totally invested in stock C. Now answer the following three questions: (a) Assume the investor has mean-variance preference. Without knowing the in- vestors' level of risk aversion, can you rank these portfolios under mean-variance preferrence? [1 point] (b) Repeat (a) but now assume stocks A, B, and C have the same expected returns. [2 points) (c) Suppose that now E(rc) > E(ra) > E(TB). And moreover, suppose that the investor is extremely risk averse. Which portfolio do you think that this investor will most likely choose? [2 points) 4. Stocks A, B, and C have the same standard deviation. The following table shows the correlations between the returns on these stocks. (note that correlation with itself is always 1). Stock A Stock B Stock C Stock A Stock B Stock C 1.0 -0.4 0.9 1.0 0.1 1.0 Given these correlations, consider the following portfolios: (1) Equally invested in stocks A and B. (2) Equally invested in stocks A and C. (3) Equally invested in stocks B and C. (4) Totally invested in stock C. Now answer the following three questions: (a) Assume the investor has mean-variance preference. Without knowing the in- vestors' level of risk aversion, can you rank these portfolios under mean-variance preferrence? [1 point] (b) Repeat (a) but now assume stocks A, B, and C have the same expected returns. [2 points) (c) Suppose that now E(rc) > E(ra) > E(TB). And moreover, suppose that the investor is extremely risk averse. Which portfolio do you think that this investor will most likely choose? [2 points)