\fQuestion 11 Imagine you are building an investment portfolio with shares of two different companies. Each share costs $11] and you have the following portfolio options: 1. Buy one share of company A and one of company El. These companies are competitors. 1ii'liith a 512% chanoe one of them will he the sole winner of a government contract, which will raise the price of theirshares to $25 {the other companf s shares will go down to $5}. 2. Eiuy one share of company C and one of oompany B. These companies are in the same sector. There is a 25% chance their sector will benet from new tax rules, which will raise the price of both shares to $33 {and a 25% chance their shares will remain at $10 each}. 3. Buy one share of oompany E and one of company F. These companies are in different sectors. There is a 25% chanoe company E's shares will go up to 53 and a 25% chance they will remain at $10. Company F faces the same chanoes and corrEponding share values, but its outcomE are unrelated to those of company E. which of the following alternatives is correct? la} Portfolio 1 hasthe highest expected return. lb} Portfolio 2 has the highest expected return. lc} Portfolio 3 hasthe highest expected return. id} The three portfolios have the same expected return. Question 12 Consider the same information in question 11. 1Il'ii'hich of the following alternatives is correct? la} Portfolio 1 hasthe highest risk {highest variance}. lb} Portfolio 2 hasthe highest risk {highest variance}. fc} Portfolio 3 has the highest risk {highest variance}. id} Portfolios 2 and 3 have the same risk {same variance}. Question 9 A person with utilityr over wealth UW} = lnW}, and initial wealth W\" = $10!],[IEII] main.r lose a SEEDDI] asset with a 25% proha hilitv. A company.r offers insurance against such loss for a price p. Compute the actuarilv fair price. p'\