Discussion Questions

Answer the following discussion questions. Two well developed paragraphs for each question. Keep each question separate.

1."Some companies find a way to insure the financing of their projects by issuing bonds. The price paid for a bond being the sum of the present values of future revenues; do you think that an investment in bonds is profitable in today’s economy? "

2."Risk is sometimes defined as the probability that return will be less than expected. In portfolio theory a stock investment’s risk is defined as the standard deviation of the probability distribution of its return. Imagine you want to create a portfolio of stocks. What criteria would you use to compose your portfolio? Discuss supposing you ar risk averse and then if you are a risk seeker."