Discussion Post
1) Risk versus Return. Investors will choose among various portfolios based upon their individual risk tolerance. Using our text and external sources, explain how investors can create an efficient portfolio?
2) Critically analyze the three main assumptions of the Capital Asset Pricing Model (CAPM) and why is the market portfolio efficient according to CAPM?
3) Using CAPM, how can investors determine a stock's expected return? Critically explain the components of the CAPM and what errors may occur when using CAPM?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.