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In the following discussion question you will describe the valuation of securities in the marketplace and the role of risk in the valuation. What are

In the following discussion question you will describe the valuation of securities in the marketplace and the role of risk in the valuation.

What are the various theories on market/security risk and how it is measured? Describe the Modern Portfolio Theory and the Capital Asset Pricing Model. What is Beta (in relationship to the stock market)? Which theory/model (of the two) do you feel more accurately describes the valuation of equity securities? Why?

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