Can you provide short answers to these questions?

1. Why are risk and return positively related?

2. How do we measure risk? and return? Can you think of alternative measures of risk?

3. Why does it lead to estimation errors when using past returns to proxy for future returns?

4. What can diversification help us with?

5. What is meant with the risk premium?And how can we estimate it?

6. How does correlation affect a portfolio? Explain using a 2-stock portfolio.

7. How is the portfolio volatility related to the number of assets in the portfolio?