Suppose an investor equally allocates their wealth between a risk-free asset and a risky asset. If the MRS of the current allocation is less than the slope of the budget line, then the investor should Select one: O a. shift more of their wealth to the risk-free asset. b. keep the same asset allocation c. shift more of their wealth to the risky asset. d. There is not information to determine an answer. O Kathy's utility function is U-wo.5, and she invests in a business that can yield $9200 with probability 2/5, and $8100 with probability 3/5. Her expected wealth is Select one: a. $1290 O b. $4160 C. $6360 O d. $8540 If Adam's utility function is U Wo.5, and he invests in a business that can yield $6000 with probability 2/5, and $4000 with probability 3/5, then his risk premium to avoid bearing this risk is Select one: a. $4800 O b. $5200 c. $49 d. $72. We may not be able to fully remove risk by diversification if Select one: a. a completely risk-free asset does not exist. O b. the asset returns in our portfolio are positively correlated O c. buying stock on margin is not allowed by financial regulators d. none of the above