For questions $58$ to $60$: Assume that risk$-$aversion, depending on individuals, takes a value in$-$between $-2$ and $2$

$($i$.$e$.,$ integers from $-2$ to $2),$ a financial planner has created the following data to illustrate the application of

utility theory to portfolio selection:

A risk$-$neutral investor is most likely to choose:

A Portfolio $2.$

B Portfolio $3.$

C Portfolios $3$ or $4.$

From the utility equation, $U=r-0\mathrm{.}5A{}^2,$ Risk$-$neutral implies that $A=0.$ In this case, $U=r$ and portfolio $3$

has the highest returns.

A risk$-$adverse investor is most likely to choose:

A Portfolio $1$ or $2.$

B Portfolio $2$ or $3.$

C Portfolio $2.$

A risk$-$seeker investor is most likely to choose:

A Portfolio $3.$

B Portfolio $4.$

C Portfolio $3$ or $4.$

Which of the following is NOT a rationale for the importance of the policy statement in

investing? It:

A$)$ helps investors understand the risks and costs of investing.

B$)$ forces investors to understand their needs and constraints.

C$)$ identifies specific stocks the investor may wish to purchase.