1. Ahmad is an engineer thinking about investing in some securities inside Egypt and wants to decide on the required rate of return on his investment. In order to do so he was told to first evaluate the risks he maybe be exposed to in this investment. He was also told to add as many securities as possible, but he believes this would add to the risk he will face.

You are required to help Ahmad by (5 marks):

1. Explaining what risks he may face through investing.
2. Which of these risks can be eliminated and how?
3. Which of these risks cannot be eliminated and why?
4. Is Ahmad correct would adding more stocks to his portfolio increase the risk, please explain to him why or why not?