1. Risk & Return and the CAPM.

Based on the following information, calculate the required return based on the CAPM:

Risk Free Rate = 3.5%

Market Return =10%

Beta = 1.08

2. Risk and Return, Coefficient of Variation

Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship.

Std Dev. Exp. Return

Company A 10.4 15.2

Company B 14.6 22.9

3. Risk and Return, Coefficient of Variation

Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship.

Std Dev. Exp. Return

Company A 7.4 13.2

Company B 11.6 18.9

4. Portfolio Theory Risk.

What is portfolio theory and why is it important to investing behavior? 250 words

5. Sources of Risk.

Identify sources of risk and contrast them (include examples) and explain why investors should be concerned with them 250 words