Your first assignment is due next week. As you've probably noticed, analyzing the risk associated with investments is a crucial part of this assignment. As you complete this week's discussion, remember to keep next week's paper in mind as you research risk in investments.

• Investors have varying degrees of risk tolerance. Definerisk toleranceand provide an example of a risk tolerance profile that matches your own approach to the markets and investing. Explain whether you believe an investor should invest in risky and riskless assets. Support your answer with an example.
• Determine whether adding securities to the portfolio reduces the portfolio risk as measured by the standard deviation and the benefits of diversification. Use historical data to examine the effects of including stocks and bonds in a portfolio. Provide support for your decision.