Diversified Risk Stock Portfolio

For this case study, you will create a portfolio of five to eight stocks that demonstrate diversified risk. List the stocks along with their current price and previous 1-year and 5-year rates of return. Below the list of stocks, address the issues described below.

• Explain the difference between portfolio risk and stand-alone risk.
• Briefly explain why you selected each stock and how this investment portfolio would have less risk than selecting just one stock.
• How does risk aversion affect a stocks required rate of return?
• Explain the distinction between a stocks price and its intrinsic value.