Consider the following assets with different expected returns and risks: Security A: E(r) = 0.15; Variance = 0.02 Security B: E(r) = 0.18; Variance = 0.01 Security C: E(r) = 0.13; Variance = 0.02 Security D: E(r) = 0.14; Variance = 0.03 For a rational investor with mean-variance preference, which security will this investor choose? OD OC OB OAConsider a single period economy which can enter one of three possible states indexed by 1, 2, and 3. Each of these states occurs with equal probability. There are three assets in this economy and their gross returns are state dependent as given below: Asset A Asset B Asset C State 1 1.75 1.05 0.80 State 2 1.20 1.05 0.90 State 3 0.5 1.05 1.31 Using the above information to answer Questions 11 - 12. What is the value of the SDF for state 2? PIs round your answer to 2 decimal places, e.g., 0.12.Which state is the worst state? states 2 and 3 O state 1 state 3 O state 2