Read the instructions carefully and complete all work in detail.

Week 3 Discussion-Refer to Chapters 6 and 7 in pdf for materials to apply to the discussion. Answer all questions in detail with examples and proper internet references to support your answers. This discussion must be total of 2 pages long.

Question 1: Is it possible to have a portfolio of two securities whose σ is less than the σ of either of the two securities? Can you show an example to justify your position?

Question 2: What is the significance of β in finance? Look up the β of IBM, Ford, and Microsoft. Which company presents the most risk for the investors, and why?