Explain what it means to take risk when investing. How is risk related to 'expected returns?' What does it mean for an investor to be 'risk averse?'
Explain the concept of 'beta coefficient.' Look up the beta coefficient of a publicly traded company of your choice (not provided in the textbook). Are you surprised by the beta coefficient associated with the stock? Why or why not (what risk is the company facing)?
How would you determine the appropriate return for an investment you chose?