1 . Directions: After reading the passage below, fill in the blanks to make the passage coherent and grammatically correct. For the blanks with a given word, fill in each blank with the proper form of the given word; for the other blanks, use one word that best fits each blank.

Play the financial markets: it’s not rocket science

Back in the 1950s, economists developed Nobel Prize-winning theories for how best to invest money in financial markets. And     1     (do) it, they drew on the theory of probability. The result was Modern Portfolio Theory (MPT),     2     shows how to create a mix of stocks, bonds and other assets (股票、证券和其他资产) to get the best possible return for the     3     (low) risk. By feeding in past performance data for each asset, the formulas of MPT reveal the relative proportions of each     4     (need) to achieve this best performance.

To pull off this miracle, MPT involves some fearsome equations that only rocket scientists might     5     (expect) to solve. But—like any attempt to model reality with mathematics—MPT makes assumptions, and the bad news is     6     they’re not very realistic. A wealth of data now suggests that MPT simply cannot capture the real complexity of markets,     7     (make) its conclusions not that trustworthy.

Even Harry Markowitz, the US economist who won the economics Nobel Prize in 1990 for developing MPT,     8     (admit) he ignored his own theory and simply split his investments equally between stocks and bonds.

The lesson of the laws of chance this time is: don’t get too clever. When it comes to investment, history suggests most of us may do best     9     simply dividing our money among so-called index trackers that just follow entire sectors of the market—and then forget about them     10     we retire. After all, caution is the best policy.