You ate a nisk-averse investor who is considering investing in one of two ecanomies. The expected return and volatilty of all shares in both economies is the same are independent-one share increasing in price has no etfect on the prices of other shares- Which economy would your choose ta imvest in? Explain Sif. orly one thing. twigher expected roturn than in the ecooomy in which all shares move together. D. A risk averse irvestor is inditferent in both cases becovee he or she faces unpendictabie risk. fou are a risk-averse investor who is considering investing in one of two oconomies. The expected refum and volatify of all stares in both economies is the same n the first economy, all shares move together-in good times all prices rise together, and in bad times they all fall togethor. in the second economy, share retarms are independent-one share increasing in price has no effect on the prices of other shares. Which economy would you choose to inwest in? Expliain. A. A risk averse investor would choose the economy in which shate retums are independent because risk can be diversinied awoy in a large portfoio. B. A risk averse investor would choose the economy in which shares move together because the uncertainty is much more prealictabio. and you have to predict. only ene thing C. A rigk averse investor would prefer the economy in which share returns are independent because by combining the shares into a portifoco no or ahe can get a higher expected return than in the economy in which all shares move together. D. A risk averse investor is inditterent in both cases because he or she faces unpredictablio risk