Chapter $7$ Revision questions

$1$ Explain the difference between na$$ve diversification and efficient diversification.

$2$ Describe what is meant by the market portfolio and how it relates to the idea of a risk premium on risky assets.

$3$ You have the following six years of data covering share A and the market portfolio:

$\backslash$table$[[$Year$,$Share A$,$Market portfolio,Weighted yearly return$],[2011,7\%,9\%,?$