**[1.1, Marks 2]** Which of the three indifference curves – denoted with “1”, “2” and “3” on the graph – passing through P is associated with a mean-variance investor with a risk aversion of 5? Justify your answer with calculations.

**[1.2, Mark 1]** Keep assuming a mean-variance investor with a risk aversion of 5 and consider a new portfolio D with a standard deviation of 5%. What expected return portfolio D has to offer to lie on the same indifference curve passing through portfolio P?

**[1.3, Mark 1]** Which portfolio would a risk-neutral investor prefer among P, A, B, C and D? Justify your answer.

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