C. cyual to 1. D. negatice 15. Suppose that investors can form portfolios out the T-bills and 3 risky assets: IBM stock with an expected return of 5% and volatility of 10%, APPL stock with an expected retum of 10% and volatility of 12%, and AMD stock with an expected return of 15% and volatility of 15%. Which of the following statements is true according to portfolio theory? A. The optimal risky portfolio for all investors is the risky portfolio with the highest Sharpe ratio. B. All investors should imvest the same fraction of their complete portfolio's moncy in the T= bills. C. Out of the money risk-iverse investors invest in the 3 risky assets, the fraction invested in each of the 3 risky assets is the same across all investors. D. Both A and C are correct. E. A, B and C are all correct. II. Short answer question: 16. There are three assets available to investors: 1) stock A with an expected return of 18% and a return standard deviation of 16%;2 ) stock B with an expected return of 8% and a return standard deviation of 9%; and 3 ) a risk-free asset with a return of 5%. The correlation between stock A and stock B is 0,4 . Mary is a risk-averse investor. Answer the following questions: a. If Mary invests 30% of her complete portfolio wealth in stock A and 70% in stock B (She invests nothing in the risk-free asset), what is the expected return and return standard deviation of her portfolio? (1 pt) b. If Mary invests 20% of her complete portfolio wealth in the risktiee asset, 30% in stock A and 50% in stock B, what is the expected return and standard deviation of her eomplete portolio? (2 pts)