Regarding portfolio optimization for an individual investor, which of the following is correct? Diversification makes risk higher. Risk aversion does not affect the final portfolio allocation. Tangency portfolio is the optimal mix of risky assets. Presence of the risk-free security does not change the optimal mix for an individual investor. 2 Suppose that only the following set of securities are available in the market: If the portfolio with the minimum variance weights are given by wA=0.8621 and wB=0.1379, what would its standard deviation be? 3 You sold short 500 shares of XYZ stock currently priced at $100. Your initial margin requirement was 50%. If interest rate is 0% and the stock is selling at $110, would you receive a margin call after one year? Assume that the maintenance margin requirement is 35%. Ignore transactions costs. No, because margin is 30%. Yes, because margin is 36%. No, because margin is 36%. Yes, because margin is 30%. 4 You buy 500 shares of XYZ stock currently priced at $100. You use $30,000 of your own money and borrow the remainder from your broker. If the rate on the margin loan is 8% and the stock is selling at $80, would you receive a margin call after one year? Assume that the margin requirement is 35%. Ignore transactions costs. Yes, because margin is 46%. No, because margin us 34%. Yes, because margin is 34%. No, because margin is 46%