Client's Financial Questions: Why is it useful to calculate the standard deviation of expected returns on a security? What is the main practical reality that limits the usefulness of this calculation? (4 marks) Identify and outline some of the features of alternative equity valuation models. Are the assumptions underlying the models reasonable? Are the input variables able to be accurately estimated in practice, and if not, what are the practical implications of this result? (7 marks) What is an efficient capital market and why is market efficiency important to financial managers? (6 marks) Provide a brief discussion of approximately 300 words detailing the risks inherent in stock returns in a portfolio of shares using the concepts of standard deviation and diversification as a basis for your discussion. (8 marks)