1. A. What are the stock market indices? What do they measure? How do we measure stock markets overall performance? B. What are the EAR and APR? Whats the difference? How to convert APR to EAR under different frequencies of compounding? C. The relation between interest rate and pricing of financial securities. D. Whats the purpose of building investment portfolios? Whats the difference between firms specific risk and market risk. Which one is diversifiable? Which risk is systematic? Which one could be reduced by forming portfolio? How does the diversification work, including high or low correlated stocks?

Please explain key points for each.