Assignment: Diversified Risk Stock Portfolio
For this case study, you will create a portfolio of five to eight stocks that demonstrate diversified risk. List the stocks along with their current price and previous 1-year and 5-year rates of return. Below the list of stocks, address the issues described below.
a. Explain the difference between portfolio risk and stand-alone risk.
b. Briefly explain why you selected each stock and how this investment portfolio would have less risk than selecting just one stock.
c. How does risk aversion affect a stock's required rate of return?
d. Explain the distinction between a stock's price and its intrinsic value.
Textbook: Financial Management and Theory 16 edition.
Format your assignment according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.