No 15.

The market risk premium is the: A net present value of the additional return an investor receives for bearing risk. B difference in returns on a risky asset for the current year as compared to the prior year. C total return earned by a portfolio based on a market basket of securities. D difference between the expected return on an individual security and that of the overall market. E difference between the expected return on a market portfolio and the risk free rate of return.

No 14.

Which one of the following terms best refers to the practice of investing in a variety of diverse assets as a means of reducing risk? A Security market line B Unsystematic C Capital asset pricing model D Diversification E Systematic

13.

Which one of the following measures the amount of systematic risk present in a particular risky asset relative to that in an average risky asset?

A Mean B Squared deviation C Variance D Beta E Standard deviation