DescriptionTermThe potential for variability in the possible outcomes associated with an investment.$$The condition in which the expected return on a security equals its required return, and there is no pressure on its price to change.$$The name given to the risk that cannot be diversified away by adding additional assets to an investment portfolio since it results from the systematic events and factors that affect all investments.$$The practice of creating a portfolio of assets for the purpose of reducing the stand$-$alone risk of the individual assets in the portfolio.$$The general term that describes the portion of an asset$$s total expected return that is greater than the return earned on the market$$s risk$-$free rate.$$The mean of the probability distribution of an investment$$s possible returns, and the return expected to be realized from owning it$.$The term applied to the risk of an asset that is measured by the standard deviation of the asset$$s expected returns.$$This model determines the appropriate required return on a security as the sum of the market$$s risk$-$free rate and a risk premium based on the market$$s risk premium and the security$$s beta coefficient.$$A measure of the sensitivity of a security$$s returns to fluctuations in the return earned by the market portfolio.$$The value of this ranges from $+1\mathrm{.}0,$ denoting that two variables move up and down in perfect synchronization to $1\mathrm{.}0,$ denoting that two variables move up and down in exactly opposite directions.