• In your own words, what is the meaning of the termsbetaandcapital asset pricing model?
• Select three stocks from the listing of the Dow Jones Industrial Average Stock Betas from Table 10.2 of the textbook. List these three stocks, along with their corresponding beta. Which one of the three stocks in your list is least risky? Why? Which one of the three stocks in your list is most risky? Why?
• If the beta of a portfolio of stocks was calculated to be 1.0, how should your portfolio react to changes in the overall market?
• If you assembled a mix of stocks for a financial portfolio for your personal use, would you prefer a low beta, a beta of 1.0, or a high beta? Why?