Question: 1. Select the correct answer. a. Stand-alone risk is the risk an investor would face if he or she held portfolio of assets. b. Risk-averse

1. Select the correct answer. a. Stand-alone risk is the risk an investor would face if he or she held portfolio of assets. b. Risk-averse investors like risk and require lower rate of return as an inducement to buy riskier securities. c. Risk premium is the difference between the expected rate of return on a given risky asset and that on a less risky asset. d. Capital Asset Pricing Model is based on the proposition that any stocks required rate of return is equal to the risk-free rate of return minus a risk premium.

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