1. Immediately following the June 2016 U.K. referendum vote to leave the European Union, the value of the British pound plummeted versus the U.S. dollar. Using a demand and supply framework forBritish pounds, identify two factors that might have contributed to this decline by shifting the demand curve for British pounds.
2. Assume you have a choice between the first investment with an expected value of $661.25 and a standard deviation of $881.55 This ‘other investment’ has an expected value of $670 and a standard deviation of $700. Would you prefer the first investment or the second investment if you are a risk averse investor? Why?