Question 9 1 pts Suppose you create a portfolio of randomly selected stocks, and you add stocks to your portfolio one at a time. As you add more and more randomly selected stocks to your portfolio you expect that 1. The systematic risk will get smaller and smaller HI. The firm-specific risk will get smaller and smaller III. Expected returns will get larger and larger IV. Expected returns will get smaller and smaller I and III only O I, II and IV only O I and II only O II and Ill only Olll only Oll only Question 10 1 pts Two investors have mean-variance maximising preferences. One investor has a risk aversion coefficient of A=3, and the other with a risk-aversion coefficient of A=2. They are choosing from among the following list of risky portfolios to include in a complete portfolio. The risk-free rate is 0.02. Portfolio Var(r) E[r] 0.08 1 0.05 2 .06 .10 .14 3 .15 4 .04 0.02 O Both investors prefer portfolio 2 O Both investors prefer portfolio 4 The investor with A=3 prefers portfolio 3 and the other investor prefers portfolio 2 The investor with A-3 prefers portfolio 2 and the other investor prefers portfolio 3