• Explain the difference between stand-alone risk and risk in a portfolio context.
• Describe how risk aversion affects a stocks required rate of return.
• Discuss the difference between diversifiable risk and market risk, and explain how each type of risk affects well-diversified investors.
• Discuss how changes in the general stock and bond markets could lead to changes in the required rate of return on a firms stock.
• Discuss how changes in a firms operations might lead to changes in the required rate of return on the firms stock.