Consider the following tow, completely separate economies. The expected return and volatility of all stocks in both economies is the same. In the first economy, all stocks move together – in good times all prices rise together and in bad times they all fall together. In the second economy, stock returns are independent – one stock increasing in price has no effect on the prices of others stocks. Assuming you are risk-averse and you could choose one of the two economies in which to invest, which one would you choose? Explain.