D. suppose a fourth investment, w, is available. it offers an expected return of 15%, and it has a standard deviation of 9%. if sharon is risk averse, can you say which investment she will choose? why or why not? are there any investments that you are certain she will not choose? (select the best answer below.)

See below.

Explanation:

A risk averse investor always chooses lower returns and lower risks as compared to higher risk and higher returns. Standard deviation being the risk, Sharon will chose an investment that gives a better relationship between return an the risk factor. In a risk return trade off scenario, which associates probabilities to returns, a risk averse investor will chose an investment that gives a higher probability of smaller but more secure return than the opposite. For example if there was an other investment with 12% return but SD of 4%, Sharon would have opted for this as it provides more security.

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reducing the scale of the market for a new product.