How do we define risk in this chapter and how do we measure it?
Answer to relevant QuestionsWhat are the two components of total risk? Which component is part of the risk-return relationship? Why?Describe the diversification potential of two assets with a -0.8 correlation. What is the potential if the correlation is +0.8? FedEx Corp stock ended the previous year at $103.39 per share. It paid a $0.35 per share dividend last year. It ended last year at $106.69. If you owned 200 shares of FedEx, what was your dollar return and percent return?Assess the risk-return relationship in T-bills (Tables) during each decade since 1950. You have $15,000 to invest. You want to purchase shares of Alaska Air at $42.88, Best Buy at $51.32, and Ford Motor at $8.51. How many shares of each company should you purchase so that your portfolio consists of 30 ...
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