Pick 2 of the following 4 prompts to answer. Include whatever you consider necessary to answer the question fully, but briefly. Things to consider could be explanation of formulas, definitions, measurements, graphs, etc. (no points given for just writing down formulas)

1. Discuss the relation between risk and expected rate of return, required rate of return, and actual rate of return. (if you write "expected return is what the investor expects to earn" you get no points as you are not telling me anything)

2. Compare and contrast standard deviation and beta. What does each tell us? What does each measure? How do they relate?

3. Discuss 4 sources of risk and provide examples.

4. Explain the security market line, the efficient frontier, and indifference curves.