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Part A (Lesson 6) 1. Indicate whether each of the following statements is true or...

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Part A (Lesson 6) 1. Indicate whether each of the following statements is true or false and explain your answer. (a) The greater the volatility of an investment, the higher the utility for a risk-averse investor. (b) The indifference curves for a less risk-averse investor have a flatter slope than the indifferences curves for a more risk-averse investor. (c) It is possible for an investor to invest more in the optimal risky portfolio than the funds he/ she has available. (d) If a risky portfolio has a certainty equivalent rate of return (CERR) of 4% and the risk-free rate is 3%, a risk averse investor will not invest in the risky portfolio. (8 marks)

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