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QUESTION 5 5.1 Differentiate and clearly explain the concepts of non-diversifiable and diversifiable risk. Support your answer with relevant and explanatory examples. 5.2 Calculatethebetacoefficientofastock,assumingthattherisk-freerateis3%, risk

QUESTION 5

5.1 Differentiate and clearly explain the concepts of non-diversifiable and diversifiable risk. Support your answer with relevant and explanatory examples.

5.2 Calculatethebetacoefficientofastock,assumingthattherisk-freerateis3%, risk premium is 2% and expected return of the stock is 6%.

5.3 Critically assess the relevance and efficacy of the CAPM model in the current everchanging and disruptive market.

[15 MARKS]

(6) (4) (5)

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