Suppose investor $satisfaction"$ with a portfolio increases with expected return and decreases

with variance according $to$ the following $utility"$ formula: $U=E(r)-1$

$2A2(r).$

Investment Expected Return, $E(r)$ Standard Deviation, $$

$10\mathrm{.}120\mathrm{.}30$

$20\mathrm{.}150\mathrm{.}50$

$30\mathrm{.}210\mathrm{.}16$

$40\mathrm{.}240\mathrm{.}21$

$(a)$ Based $on$ the formula for investor satisfaction $orutility,"$ which investment would youselect $if$ you were risk averse with $A=4?$

$(b)$ Which investment would you select $if$ you were risk neutral, with $A=0?$

$(c)$ The coefficient $Ain$ the utility formula represents

$(A)$ investor$s$ return requirement.

$(B)$ investor$s$ aversion $to$ risk.

$(C)$ preference for one unit $of$ return per four units $of$ risk