Question: A. Do you think risk neutral agents or risk lovers would actively use diversification, in portfolio management? If yes, under which conditions? B. If you

A. Do you think risk neutral agents or risk lovers would actively use diversification, in portfolio management? If yes, under which conditions?

B. If you have to choose one of the stocks A and B (no mixing) and you are (i) risk neutral or (ii) a risk lover, would you choose the security with the highest Sharpe Ratio? Why? Fully explain your answer.

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