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a) what are the two most commonly used measures of risk in finance. How are they related to each other? b) why risk premium for

a) what are the two most commonly used measures of risk in finance. How are they related to each other?

b) why risk premium for assets (stocks) is determined by its systematic risk only?

Assume, we hold well-diversified portfolio of 40 stocks and we are adding random 5 stocks to it. How will addition of these stocks affect expected return of the portfolio? Volatility (standard deviation) of the portfolio?

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