Consider the optimal portfolio of 2 risky and 1 risk-free asset. What is true about the portfolio shares w_1 (risky asset 1), w_2 (risky asset 2) and w_3 (risk-free asset)? Remember that w_1+w_2+w_3=1.

	All investors will have the same w_1 and w_2 but they will differ in their w_3 according to their risk aversion.
	All investors will have the same w_1, w_2 and w_3, and in addition w_1=w_2=w_3.
	All investors will have the same ratio of w_1/w_2 but they will differ in their w_3 and w_1+w_2 according to their risk aversion.

What is the efficient frontier with many risky assets and one risk-free asset?

	The upward-sloping portion of the curve obtained by investing in the risky assets.
	The straight line through the risk-free asset and the risky asset with the highest expected return.
	The set of all portfolios that combine the risk-free asset and the minimum variance portfolio of the multiple risky assets.
	It is a straight line through the risk-free asset and the portfolio of risky assets that has the highest Sharpe ratio.

You are a mean variance investor and hold an optimal portfolio. Suppose that suddenly the correlation between stock A and other stocks in the portfolio goes down. What should you do with respect to your portfolio holdings?

Question 3 options:

	Invest more in stock A.
	Keep your investment in the risky assets the same than before.
	Invest less in stock A.