M Question 25 T uppose the Nike and Starbucks stocks (and the risk-free rate) have the following statistics. 0.25 Etrnke] Eltstarbucks 18% Nike 12% starbucks 4% Preke, stricks 28% 21% Risk-free 0 0.2 0.15 Expected return Starbeks 0.1 0.05 Risk-free 0 0 0.1 03 0.4 0.2 Standard deviation There are two investors--Blue and Gray and their degrees of risk aversion A are 2 and 8, respectively. Assume they have the following utility function. Er] The chart shows Blue and Gray's indifference curves, respectively. 6 Which of the following statements about Blue and Gray is false? 7 28 A Gray is more risk-averse than Blue 39 B Gray prefers Starbucks to Nike. 30 C Blue prefers Nike to Starbucks. 31 D None of the above