1. Risk and Return We have seen that over long periods stock investments have tended to substantially outperform bond investments. However, it is not at all uncommon to observe investors with long horizons holding their investments entirely in bonds. Are such investors irrational?

2. Stocks versus Gambling Critically evaluate the following statement among your group: Playing the stock market is like gambling. Such speculative investing has no social value, other than the pleasure people get from this form of gambling.