1.Suppose that you know the risk and the expected return for two stocks. Discuss the process you might utilize to determine which of the two stocks is a better buy. You may assume that the two stocks will be the only assets held in your portfolio.

2.In recent years, investors have agreed that the market portfolio consists of more than just a group of U.S. stocks and bonds. If you are an investor who invests in only U.S. stocks and bonds, describe the effects on the risk in your portfolio.