a. Discuss if it is possible for a stock to have high total risk but low systematic risk. Use examples as appropriate.

b. Since total risk is larger than systematic risk, does it imply that standard deviation of stock returns must always be greater than the stock beta ?

c. Referring to the two models : Constant Dividend Growth Model (or Dividend Discount Model) & Capital Asset Pricing Model (CAPM), which one should be a better model for the calculation of the cost of equity (i.e. the cost of raising funds via equity).

a. b. Discuss if it is possible for a stock to have high total risk but low systematic risk. Use examples as appropriate. Since total risk is larger than systematic risk, does it imply that standard deviation of stock returns must always be greater than the stock beta ? Referring to the two models : Constant Dividend Growth Model (or Dividend Discount Model) & Capital Asset Pricing Model (CAPM), which one should be a better model for the calculation of the cost of equity (1.e. the cost of raising funds via equity). c