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You are a risk-averso investor who is considering investing in one of two economies. The expected retum and volaslity of all stocks in both economies

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You are a risk-averso investor who is considering investing in one of two economies. The expected retum and volaslity of all stocks in both economies is the same. In the first economy, all stocks the prices of other stocks. Which economy would you chocse to invest in? Explain. (Select the best choice below) A. A risk averse investor is indifferent in both cases because he or she faces unperedictable risk 8. A nisk averse investor would choose the economy in which stocks move together becavse the uncertanfly is much more predictablo, and you have to predict only one thing C. A risk averse investar would choose the economy in which stock returns are independent because risk can be diversified anway in a large portolio. D. A rak averse investor would prefer the economy in which stock, returns are indepensent because by combining the stocks into a portolio he or ate can get a higher expected reburn than in the economy in which all stocks move togother

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