How to minimize risk? consider returns of two investment vehicles, say x and y . suppose that on a $100 investment, each averages a $5 profit with a standard deviation of $10. that is, if you invest $100, then e(x) = e(y ) =$105 and sd(x) = sd(y ) =$10. now, you are given $200. do you plan to buy two shares of x or one share of each of x and y ? which choice has a smaller risk?

Helen tells her nephew, bernard, that she will pay him $100 if he will stop smoking for six months. helen was hopeful that if bernard stopped smoking for six months, he would stop altogether. bernard stops smoking for six months but then resumes his smoking. helen will not pay him. she says that the type of promise she made cannot constitute a binding contract and that, furthermore, it was at least implied that he would stop smoking for good. can bernard legally collect $100 from helen