The capital asset prioing model $($CAPM$)$ explains how risk should be considered when stocks and other assets are belk $$ The CASM stabes that any stock's rrquared rate of refurn is $$ the risk$-$free rate of return plus a risk premium that reflects only the risk remaining in a portfotio is typically $$

$$ diversfication. Most indreiduals hold stocks in portfolios. The risk of a stock held and return of the portfolio in which it is held. the stock's risk when it is held alone. Therelore, the riak and rebum of an indwidual stock should be atalysed in serms of how the security atlects che rik