Question 1
Which of the following are not factors that may impact the return on stock or bond investments?
◦ An individual investor's comfort with the level of risk of an investment.
◦ Recent weakness in China's economy.
◦ Increasing interest rates in the U.S. economy.
◦ Increasing inflation in the U.S. and Europe.
Question 2
If investors were risk averse they would want to
◦ maximize the return they are receiving compared to the standard deviation of the returns on the particular security.
◦ invest in technology stocks.
◦ minimize risk, i.e., standard deviation, for the amount of return they are receiving on an investment.
◦ seek the highest return they could find.