Answer the questions 6-1/6-2/6-3

6-1

a. What is meant by the investors required rate of return?

b. How do we measure the riskiness of an asset?

c. How should the proposed measurement of risk be interpreted?

6-2

What is (a) unsystematic risk (company-unique or diversifiable risk) and (b) systematic risk (market or nondiversifiable risk)?

6-3

What is a beta? How is it used to calculate r, the investors required rate of return?