Match the terms relating to the basic terminology and concepts of risk and rates of return on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description Risk A. 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. B. Expected rate of return That portion of an investment's risk calculated as the difference between its total risk and its firm-specific risk. Beta coefficient C. D. Market risk The risk of an asset when it is the only asset in an investor's portfolio. The condition of price stability that results from the equality of a security's expected and required returns. | E. Correlation coefficient (P) A model that calculates the required return on an asset as the sum of the market's risk-free rate and the asset's nondiversifiable risk. Stand-alone risk F. A measure of the sensitivity of a security's returns to fluctuations in the return earned by the market portfolio. Risk premium Diversification G. A measurement of the tendency of two variables to move together. H. The rate of return expected to be realized from an investment, calculated as the mean of the probability distribution of its possible returns. I. The result of adding additional assets to a portfolio, when the returns of the individual assets are non-correlated. O Capital Asset Pricing Model Equilibrium J. The possibility that an actual outcome will be better or worse than its expected outcome