1. Imagine you are an individual facing the decision of whether to invest in a particular asset or choose between two different assets. In this context, you need to carefully consider several factors that influence your investment choices. These factors have a significant impact on your decision-making process. a. List and explain the four main factors that an individual should consider when deciding whether to buy and hold an asset or choose one asset over another. b. Compare and contrast the concepts of expected return and risk as outlined in the text. How do these two factors interact in influencing investment decisions? c. Provide an example scenario where an asset might have a higher expected return than an alternative asset but also carries higher risk. How might an individual's risk tolerance affect their decision in this scenario? d. Explain the concept of liquidity and its importance in investment decisions. How might the level of liquidity influence an individual's choice between two assets with similar expected returns and risks? e. Considering all the factors mentioned in the text, discuss how an individual's investment decision might change if they have a substantial amount of wealth versus if they have limited resources. Note: In your answers, use clear explanations and examples to demonstrate your understanding of each factor and its significance in the investment decision-making process. 2. The bond market is a crucial component of the financial markets, where the interaction of supply and demand determines bond prices and yields. Assume you are explaining the dynamics of the bond market to a group of finance students. In this context: a. Explain the factors that influence the supply of bonds in the market. b. Discuss the factors that affect the demand for bonds. c. Illustrate how changes in bond prices and yields are linked to shifts in bond supply and demand. Provide an example scenario where an increase in bond demand leads to price and yield changes. e) Analyze the impact of central bank actions, increase in the nominal money supply, on the supply and demand dynamics in the bond market. d. Considering recent economic events, discuss how supply and demand dynamics in the bond market have been influenced. Include factors such as changes in government borrowing due to fiscal policies or shifts in investor sentiment due to economic uncertainties. Note: In your responses, use clear examples and explanations to demonstrate your understanding of the interplay between bond supply and demand and how they impact bond prices, yields, and overall market conditions