The graph to the right shows the budget line and indifference curves for two investors, A and B. Labels with the subscript 'm' refer to the stock market as a whole. Which of the following correctly interprets the graphical analysis? OA. B is more risk averse than A. Although both investors are risk averse and will want to invest in a mixture of stocks and risk-free T-bills, A will invest a greater portion of her wealth in stocks OB. A is more risk averse than B. While A will invest in a mixture of stocks and risk-free T-bills, B will want to invest more than 100 percent of her wealth in stocks ⒸC. A is more risk averse than B. Although both investors are risk averse and will want to invest in a mixture of stocks and risk-free T-bills, B will invest a greater portion of her wealth in stocks OD. B is more risk averse than A. While B will invest in a mixture of stocks and risk-free T-bills, A will want to invest more than 100 percent of her wealth in stocks RA R U₂ Standard deviation of return

The graph to the right shows the budget line and indifference curves for two investors, A and B. Labels with the subscript 'm' refer to the stock market as a whole. Which of the following correctly interprets the graphical analysis? OA. B is more risk averse than A. Although both investors are risk averse and will want to invest in a mixture of stocks and risk-free T-bills, A will invest a greater portion of her wealth in stocks OB. A is more risk averse than B. While A will invest in a mixture of stocks and risk-free T-bills, B will want to invest more than 100 percent of her wealth in stocks ⒸC. A is more risk averse than B. Although both investors are risk averse and will want to invest in a mixture of stocks and risk-free T-bills, B will invest a greater portion of her wealth in stocks OD. B is more risk averse than A. While B will invest in a mixture of stocks and risk-free T-bills, A will want to invest more than 100 percent of her wealth in stocks RA R U₂ Standard deviation of return

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: The Basic Tools Of Finance

Section: Chapter Questions

Problem 9PA

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