1. What investment strategy provides a "free lunch" by allowing investors to enjoy lower levels of risk for a desired level of return?
a. investing in US treasury instruments
b. investing in investment grade corporate bonds
c. investing in a diversified portfolio of common stocks
d. investing in a small number of recently well performing common stocks
2. If a Coke can be purchased in a vending machine on campus for $1.25, and for $1.00 at a convenience store, what percentage savings would you realize if you bought the convenience store Coke?