Question: 12) An efficient portfolio a. Has only unique risk b. Provides the highest level of return per unit of risk c. Has no risk at

12) An efficient portfolio a. Has only unique risk b. Provides

12) An efficient portfolio a. Has only unique risk b. Provides the highest level of return per unit of risk c. Has no risk at all d. Always has the lowest amount of risk possible

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Risk-averse consumers always prefer insurance that is actuarially fair but not full to full insurance that is actuarially unfair but the opposite is true for risk-loving consumers.

There are no possible utility functions in which a person is indifferent between actuarially fair, full insurance and actuarially fair, partial insurance.

A consumer with declining marginal utility of income will never prefer actuarially fair, partial insurance to actuarially unfair, full insurance.