FIN435 • Chapter 8 — Risk and Return Spring 2026

Modern Portfolio Theory (MPT), diversification, portfolio risk/return, and CAPM (beta & the Security Market Line). Chapter date 2/5

Folder items: ppt, and your game links (CAPM / FF3 / FF5). Images: image142.jpg, image043.jpg, image045.jpg, etc.

Theme:

Core Materials

Chapter 8 Slides (PPTX) Term Project Game: CAPM Game: FF3 Game: FF5

Portfolio overview (Investopedia): Steps to Build an Optimal Portfolio

Quick Definitions

Return: reward you earn (expected or realized).
Risk: variability of returns (often standard deviation); investors usually care more about downside risk.
Diversification: reducing portfolio volatility by mixing imperfectly correlated assets.
Systematic risk: market-related risk measured by beta (CAPM).

Quiz Links

MPT (Investopedia) Risk Tolerance (Quiz)

Steps to Build an Optimal Stock Portfolio (Broker Workflow)

Step 1 — Know Your Client (“Know Yourself”)

Client profile checklist

Investment goals (retirement, income, growth)
Risk tolerance (averse / neutral / seeking)
Investment horizon (1–3, 3–7, 7+ years)
Liquidity needs (cash access frequency)
Market knowledge (beginner → expert)
Ethical/sector preferences (ESG, tech, dividends, etc.)

The checklist is the “inputs.” The risk profile below turns those inputs into a real portfolio plan.

Deliverable

Write a 6–8 line “Client Investment Policy Statement” (IPS): objectives, risk tolerance, horizon, constraints.

This IPS drives the strategy and portfolio design.

IPS mini-template (click)

Objective “I want ____ (income/growth) for ____ (retirement/house/etc.).”

Risk “I can tolerate ____% drop without panic-selling.”

Horizon “My horizon is ____ years.”

Liquidity “I need cash every ____ (month/quarter/year).”

Constraints “No ____ sectors; max ____% in one stock.”

Risk profile → recommended securities

Click each profile. Inside, you’ll see recommendations aligned to the same checklist items.

Conservative client (risk-averse)

Investment goals

Income + capital preservation
High-quality bond funds / short-term bond ETFs
Dividend-focused broad ETFs (quality dividends)

Risk tolerance

Lower equity weight; avoid highly volatile single stocks
Favor investment-grade bonds and low-volatility equity
Prefer diversified funds over concentrated bets

Investment horizon

1–3 years: cash-like + short Treasuries/short bonds
3–7 years: add moderate equities slowly
7+ years: still cautious, but can hold more diversified equities

Liquidity needs

Emergency fund first (cash / money market)
Ladder short-term Treasuries for known cash dates
Avoid lockups / illiquid alternatives

Market knowledge

Use simple, diversified index ETFs
Avoid leverage, options, and frequent trading
Automate rebalancing 1–2x/year

Ethical/sector preferences

ESG-screened broad-market ETFs (if requested)
Dividend/quality tilts without concentration
Document exclusions in IPS (clear + measurable)

Example allocation idea (classroom example): 70–85% bonds/cash-like + 15–30% diversified equities.

Balanced client (risk-neutral)

Investment goals

Growth + some income
Broad-market equity index ETFs (US + international)
Core bond fund for stability

Risk tolerance

Accepts normal market swings
Mix of equities + bonds to smooth volatility
Diversify across sectors + regions

Investment horizon

1–3 years: still keep meaningful safer assets
3–7 years: core balanced mix works well
7+ years: can tilt more to equities if desired

Liquidity needs

Keep a cash buffer + bond sleeve for near-term needs
Match known spending with safer assets
Equities for longer-horizon goals

Market knowledge

Use a “core + satellite” approach
Core: broad index funds; Satellite: small tilts (value, dividend, tech)
Rebalance on schedule (not emotions)

Ethical/sector preferences

ESG broad index + sector exclusions if needed
Cap any single sector ETF to avoid concentration
Write limits: “max 10–15% in any one sector”

Example allocation idea (classroom example): 50–70% equities + 30–50% bonds/cash-like.

Aggressive client (risk-seeking)

Investment goals

Maximum long-run growth
Broad equities + growth tilts (innovation/tech/semis)
Small-cap and emerging markets exposure (diversified)

Risk tolerance

Can tolerate large drawdowns without panic-selling
Higher equity weight; fewer bonds
Still diversify (aggressive ≠ all-in one stock)

Investment horizon

7+ years fits best for aggressive positioning
If horizon is short, “aggressive” is usually a bad mismatch
Long horizon lets volatility average out (sometimes)

Liquidity needs

Keep liquidity bucket separate (cash/bonds) so you don’t sell equities at the bottom
Avoid illiquid bets if cash needs are frequent
Use rebalancing bands for risk control

Market knowledge

May include factor tilts (small, value, momentum) via diversified funds
Avoid leverage unless IPS explicitly allows it (and client truly understands it)
Document rules: entry, rebalancing, and max position sizes

Ethical/sector preferences

ESG growth funds exist, but watch fees + concentration
Sector tilts should have caps (risk control)
Write: “max 20% any one theme/sector”

Example allocation idea (classroom example): 80–100% equities + 0–20% bonds/cash-like.

Class note: These are educational “security type” examples (not personal financial advice). Real recommendations require client-specific details.

Step 2 — Define Investment Strategy

Common styles

Growth (high-growth firms)
Value (undervalued fundamentals)
Dividend (stable cash flows)
Sector rotation (cycle-based)
Index vs active (passive vs selection/tilts)

Strategy = “how we choose what to buy” + “how we control risk.”

Constraint awareness

Strategy must match the IPS: a short-horizon, risk-averse client should not be in a high-volatility, concentrated growth portfolio.

Quick mismatch examples (click)

Bad match: “Need cash in 12 months” + “all-in tech growth.”
Bad match: “Panic-sells easily” + “high beta meme stocks.”
Better match: “Needs stability” + “bonds + diversified dividend/low-vol funds.”

Step 3 — Market Research & Stock Selection

Fundamental analysis (use Apple as the example)

What you check (and what it means)

Revenue trend: Is Apple’s sales growing over time, flat, or shrinking?
Earnings trend: Are profits growing faster/slower than revenue?
Margins: Are gross margin / operating margin stable or improving?
Valuation: P/E, PEG, price-to-book (is the price “expensive” vs growth?)
Debt & stability: Can Apple easily cover interest + repay debt?
Competition: Samsung/Google ecosystem pressure, services growth, China exposure, etc.

Technical analysis (short-term) — Apple example

Three quick tools

Moving averages (SMA/EMA): is AAPL above or below the 50-day and 200-day?
RSI: overbought (>70) or oversold (<30)?
Volume: do big price moves happen on high volume (stronger signal)?

Macro factors — Apple example

Why macro matters for Apple

Interest rates: higher rates can pressure valuations of large growth/quality stocks.
Inflation: affects consumer spending; iPhone upgrades can be delayed.
Growth expectations: recession fears can hit discretionary electronics demand.
Risk sentiment: “risk-on” boosts equities; “risk-off” can cause selloffs even in great firms.
FX (USD): strong dollar can reduce reported overseas revenue.

Step 4–6 — Build (MPT), Execute, Monitor & Rebalance

Step 4 — Build (MPT)

Use diversification + correlations to build a portfolio with the “best” risk/return tradeoff for the client.

Student checklist (click)

Pick 2–5 assets (stocks/ETFs) from different sectors.
Compute each asset’s average return and standard deviation.
Compute correlations between assets (key for diversification).
Choose weights (w) and compute E[Rp] and σp.
Optional: use Solver to minimize σp for a target return.

Step 5 — Execute (place trades)

Turn weights into real trades: buy the right dollar amounts, at reasonable costs, with basic safeguards.

Execution rules (click)

Convert weights to dollars: dollars = weight × total portfolio value.
Control costs: watch spreads, commissions, and fund expense ratios.
Use simple order choices: market vs limit (limit helps avoid bad fills).
Avoid concentration: cap any single stock (example cap: 10–15%).
No leverage unless IPS explicitly allows it.

Step 6 — Monitor & Rebalance

Portfolios drift. Rebalancing keeps risk aligned with the IPS and prevents “accidental” overexposure.

Two rebalancing methods (click)

Calendar: rebalance every quarter / every year.
Threshold bands: rebalance when a weight drifts beyond a band (ex: ±5%).

Homework Submission (Team) — 1 Page (Due with First Midterm Exam)

TEAM HOMEWORK (1 page) — Portfolio Plan Submission (click)

Submit ONE page per team. This is your “mini portfolio report.” Keep it clean + readable. Tables may be small. Bullet points are fine.

What to include (required)

Team + client profile (2–3 lines): goal + horizon + risk tolerance + liquidity needs.
Chosen assets (2–5) + sectors: tickers + sector + 1 sentence “why these?”
Table of inputs: average return, σ, and correlations.
Target weights (sum to 100%) + E[Rp] and σp.
Execution plan: assume $10,000. Convert weights → dollars + rules (cap, limit orders, costs).
Rebalancing plan: calendar OR bands (and why).

Formatting rules

One page only (PDF preferred).
Use headings + one small table.
Weights must add to 100%.
Returns and σ shown in %.

Submission

File name: FIN435_Ch8_Portfolio.docx
Put all team member names on the page.

READ THIS How to Write the Chapter 8 Homework (Examples)

Use this format. If your submission is too general, revise it to match these examples.

Common mistake (avoid this)

Many teams accidentally write definitions instead of a client plan. That version is too general to grade.

Too general (example)

Lists the categories (goal / risk / horizon / liquidity) but does not choose one.
No specific client (age, situation, goal).
No IPS rules (risk limit, constraints, rebalancing rule).
No portfolio weights that add to 100%.

What to do instead (simple fix)

Pick one client (2 lines: age + goal).
Pick one risk level + horizon + liquidity level (1 sentence each).
Write a 6-bullet IPS (objective, risk limit, horizon, liquidity, constraints, rebalancing).
Give a 100% allocation that matches the IPS.

✅ Example 1 — Conservative Client (Retired / needs income)

1) Client Profile Checklist (choices + short reasons)

Client: “Mr. James” (Age 67), retired; portfolio helps pay monthly bills.
Goal: Income + capital preservation (needs stable cash flow).
Risk tolerance: Conservative (would panic if account drops >10–12%).
Horizon: Mid-term (3–7 years) (money supports retirement spending now).
Liquidity needs: High (needs cash monthly).
Market knowledge: Beginner (simple, low-maintenance).
Preferences: Avoid crypto and “single stock bets.” Wants low fees.

2) IPS (6 bullets — specific)

Objective: Generate steady income while protecting principal.
Return goal: ~4–6% long-run total return target (not guaranteed).
Risk constraint: Avoid portfolios likely to drop >15% in a bad year; target lower volatility.
Time horizon: 3–7 years, with ongoing withdrawals.
Liquidity constraint: Maintain a cash/bond bucket for monthly needs (no forced stock selling).
Diversification + rebalancing: Diversified across bond types + dividend equities; rebalance annually or at ±5% drift.

3) Portfolio Allocation (must = 100%)

Short-term Treasuries / money market: 15%
Investment-grade bond fund (core): 45%
TIPS (inflation protection): 10%
Dividend/low-volatility equity ETF: 25%
REIT fund: 5%

Why this matches: high bond/cash share reduces drawdowns and supports monthly withdrawals; small equity sleeve fights inflation.

4) Strategy (pick ONE)

Dividend + high-quality bond (mostly passive): diversified funds, low fees, scheduled rebalancing (no frequent trading).

✅ Example 2 — Balanced Client (Young professional / long horizon)

1) Client Profile Checklist (choices + short reasons)

Client: “Maria” (Age 28), stable job, saving for long-run wealth.
Goal: Growth (wealth building).
Risk tolerance: Balanced (can tolerate ~15–20% drop without selling).
Horizon: Long-term (7+ years) (10+ years).
Liquidity needs: Low (emergency fund is separate).
Market knowledge: Beginner (does not want to pick individual stocks).
Preferences: Simple + low fee; no crypto.

2) IPS (6 bullets — specific)

Objective: Long-term capital growth with moderate volatility.
Return goal: ~7–9% average annual return target over the long run (not guaranteed).
Risk constraint: Avoid extreme portfolios that could drop 30–40%; tolerate about 15–20% drawdown.
Time horizon: 10+ years.
Liquidity constraint: Minimal withdrawals expected; keep small cash buffer.
Diversification + rebalancing: Diversify across US/international stocks + bonds; rebalance annually or at ±5% drift.

3) Portfolio Allocation (must = 100%)

US stock index fund: 45%
International stock index fund: 20%
Core bond fund: 25%
Cash/money market: 5%
REIT fund: 5%

Why this matches: stocks drive growth; bonds/cash reduce volatility; international + REIT add diversification.

4) Strategy (pick ONE)

Passive indexing: diversified index funds + low fees + scheduled rebalancing fits a beginner and long horizon.

✅ Example 3 — Aggressive Client (High risk tolerance / long horizon)

1) Client Profile Checklist (choices + short reasons)

Client: “Zach” (Age 22), no debt, high savings rate, long runway.
Goal: Maximum growth (build wealth over 15+ years).
Risk tolerance: Aggressive (can tolerate 30%+ drawdown without panic-selling).
Horizon: Long-term (7+ years) (15+ years).
Liquidity needs: Low (no planned withdrawals for years).
Market knowledge: Intermediate (understands volatility).
Preferences: Tech tilt OK, but no single stock >10%.

2) IPS (6 bullets — specific)

Objective: Maximize long-run capital growth.
Return goal: Seek 9–12% long-run average return target (not guaranteed).
Risk constraint: Accept large drawdowns; avoid concentration (no single stock >10%).
Time horizon: 15+ years.
Liquidity constraint: Minimal; keep small cash sleeve for rebalancing.
Diversification + rebalancing: Diversify across US/international + EM + small-cap; rebalance annually or at ±5% drift.

3) Portfolio Allocation (must = 100%)

US total stock market index: 55%
International developed markets index: 20%
Emerging markets index: 10%
Small-cap diversified fund: 10%
Core bonds / cash-like: 5%

Why this matches: mostly equities for growth; small bond/cash sleeve helps rebalancing and avoids forced selling.

4) Strategy (pick ONE)

Index core + small growth tilt: broad index funds first; limited tilts with caps (risk control).

✅ Quick grading checklist (what I look for)

Client is specific (age + situation + goal).
Checklist chooses ONE option each + short reason (not definitions).
IPS includes risk limit, horizon, liquidity, and rebalancing rule.
Allocation totals 100% and matches the IPS.
Strategy is clear and matches the client (not random).

Reminder: Classroom exercise (not personal financial advice).

Modern Portfolio Theory (MPT): What You Need to Know

Core concept

MPT is a framework to maximize expected return for a given level of risk through diversification and correlation management.

Markowitz (1952): risk is portfolio variance/standard deviation; correlations are essential.

Video: Markowitz Model & Modern Portfolio Theory (Explained)

Open on YouTube ~10 minutes Markowitz • Efficient Frontier • Diversification

While watching, listen for: correlation, efficient frontier, and why adding an asset can reduce risk.

Efficient Frontier

Every portfolio is a point on a risk-return plane.
Efficient portfolios: highest return for a given risk.
Goal: pick a portfolio on the frontier consistent with the IPS.

Video: Efficient Frontier (Investopedia)

Watch for: highest return for given risk and why diversification bends the curve.

Criticisms (important)

Variance treats upside and downside volatility equally.
Investors often focus on downside risk (PMPT).
Inputs (expected returns/correlations) can be unstable over time.

Portfolio Math (Return and Risk)

Portfolio expected return

E[R_p] = Σ w_i · E[R_i]

Example (3 stocks): w1*r1 + w2*r2 + w3*r3

Portfolio variance (concept)

σ_p² = Σ w_i² σ_i² + ΣΣ 2 w_iw_j ρ_ij σ_iσ_j

Correlation terms drive diversification benefits.

Two-stock special case

σ_p = √( w1²σ1² + w2²σ2² + 2w1w2ρ12σ1σ2 )

If ρ is low/negative, risk drops sharply.

Correlation (ρ) and Covariance: what −1, 0, +1 mean (VERY testable)

Correlation range

−1 ≤ ρ ≤ +1
ρ = +1: perfect positive correlation (move together)
ρ = 0: no linear relationship (uncorrelated)
ρ = −1: perfect negative correlation (move opposite)

What it means for diversification (click)

ρ = +1 → almost no diversification benefit.
ρ = 0 → diversification helps (risk falls, but not to zero).
ρ = −1 → in theory you can build a zero-risk portfolio with the right weights (rare).

Correlation picture (interactive)

Click a correlation value to see how two stocks move. Blue = Stock 1 • Green = Stock 2

Pick ρ:

With ρ = +1, the two stocks rise/fall together → diversification benefit is minimal.

Why “low correlation” matters (click)

The risk formula has a 2w1w2ρ12σ1σ2 term.
If ρ12 is lower, that term is smaller → portfolio variance drops.
ρ = +1: no “cancellation”.
ρ = 0: shocks don’t consistently hit both together.
ρ = −1: one offsets the other (best-case hedge; rare).

Key relationships

ρ₁₂ = σ₁₂ / (σ₁ · σ₂)

σ₁₂ = ρ₁₂ · σ₁ · σ₂

Translation: covariance is just “correlation × σ1 × σ2”.

Multi-stock templates (3 / 4 / 5 / 6 / 7 / 8 stocks) — term project uses 8

3-Stock Portfolio

Expected Return

E[R_p] = w₁r₁ + w₂r₂ + w₃r₃

Standard Deviation

σ_p = √( w₁²σ₁² + w₂²σ₂² + w₃²σ₃² + 2w₁w₂ρ₁₂σ₁σ₂ + 2w₁w₃ρ₁₃σ₁σ₃ + 2w₂w₃ρ₂₃σ₂σ₃ )

8-Stock Portfolio (TERM PROJECT)

Expected Return

E[R_p] = Σ w_ir_i (i=1..8)

Standard Deviation

σ_p = √( Σ w_i²σ_i² (i=1..8) + ΣΣ 2w_iw_jρ_ijσ_iσ_j (all i<j) )

Matrix form (cleanest for 8 stocks) (click)

Let Σ be the 8×8 covariance matrix and w be the 8×1 weight vector.
Portfolio variance: σ_p² = wᵀ Σ w
Portfolio stdev: σ_p = √(wᵀ Σ w)

In Excel: build the covariance matrix, then use MMULT to compute wᵀΣw.

Sanity checks (do these before submitting) (click)

Weights sum to 1: Σw = 1
All σ’s are nonnegative; correlations satisfy -1 ≤ ρ ≤ 1
Variance can’t be negative; if you get negative → formula/table error.
If all ρ ≈ +1, diversification barely helps (σp stays high).

CAPM, Beta, and the Security Market Line (SML)

CAPM equation

E[R_i] = R_f + β_i(E[R_m] − R_f)

β measures sensitivity to the market (systematic risk).
(E[Rm] − Rf) is the market risk premium.

Portfolio beta

β_p = Σ w_i β_i

Weighted average of component betas.

SML interpretation

Intercept at β=0 is Rf.
Slope is the market risk premium (E[Rm] − Rf).
Higher β → higher required return (if CAPM holds).

Security Market Line (SML) — drawn + examples

The SML shows the required return for each level of systematic risk (beta). Points above the line look “cheap” (higher return for their beta); points below look “expensive”.

R_f (%) E[R_m] (%) β = 0 → Rf β = 1 → Market

Example betas

WMT: β = 0.67 (defensive)
AAPL: β = 1.09 (near market)
NVDA: β = 2.36 (very sensitive to market)

How to read the picture

β = 0 is the risk-free asset → required return is Rf.
β = 1 is the market portfolio → required return is E[Rm].
Higher β means higher required return because you take more market risk.

In class: if two stocks have similar expected returns, prefer the one with lower β — unless you intentionally want more market exposure.

In-Class Exercises (ICE) — Questions + hidden solutions

3-Stock Risk–Return Game

In class: work the question first. Then click Show solution to check your work.

ICE 1 — MPT “optimal” 3-stock portfolio (A, B, C)

Question

Goal: achieve the best investment results (low risk, high return) using Modern Portfolio Theory. You have $10,000. How should you allocate funds among three stocks (A, B, C) to create an “optimal” portfolio?

Year	Stock A	Stock B	Stock C
1	10%	4%	12%
2	5%	6%	5%
3	4%	8%	7%
4	7%	10%	8%
5	1%	5%	14%

Required steps: (1) mean & risk (σ) for each stock, (2) correlations (3 pairs), (3) set up portfolio mean & risk, then find an “optimal” allocation.

✅ When finished, click here: Jump to ICE 1 Solution

ICE 1 Solution (click to reveal)

Show solution

Your page already includes the MPT mini-app below that reproduces the logic. In class, you can grade: correct means, σ, correlations, and a sensible weight set that improves Sharpe or lowers σ for similar return.

Mean returns (%): A=5.40, B=6.60, C=9.20
Std dev (%): A=3.36, B=2.41, C=3.70
Correlations: ρAB=-0.037, ρAC=-0.109, ρBC=-0.550

MPT Mini-App: Efficient Frontier (3 Stocks: A, B, C)

Uses the ICE 1 inputs by default (A,B,C). Generates many portfolios, draws the cloud + the efficient frontier curve, and highlights the minimum-variance and max Sharpe portfolios.

Inputs (ICE defaults)

	Mean Return (%)	Std Dev (%)
Stock A
Stock B
Stock C

Correlations (ρ)

Pair	ρ
A–B
A–C
B–C

R_f (%) # Portfolios

Table rows shown: 100

Chart

Show random portfolio cloud Show legend

Highlighted portfolios

Type	wA	wB	wC	E[Rp]%	σp%	Sharpe
Click “Generate Frontier”.

Portfolio table (first 100 shown)

#	wA	wB	wC	E[Rp]%	σp%	Sharpe

ICE 2 — Two-Stock Portfolio: E[Rp] and σp (Diversification)

Question

You have two risky assets: Stock A and Stock B. Compute the portfolio’s expected return and standard deviation.

	Expected Return	Std Dev (σ)
Stock A	8%	20%
Stock B	12%	30%

Portfolio weights: wA = 60%, wB = 40%

Correlation: ρAB = 0.20

Steps: (1) E[Rp] = wA·EA + wB·EB, (2) σp = √(wA²σA² + wB²σB² + 2wAwBρσAσB)

ICE 2 Solution (click to reveal)

Show solution

E[R_p] = 0.6(0.08) + 0.4(0.12) = 0.096 = 9.6%

σ_p² = (0.6²)(0.20²) + (0.4²)(0.30²) + 2(0.6)(0.4)(0.20)(0.20)(0.30)

= 0.36(0.04) + 0.16(0.09) + 0.48(0.20)(0.06) = 0.0144 + 0.0144 + 0.00576 = 0.03456

σ_p = √0.03456 = 0.1859 ≈ 18.6%

Notice: both stocks are risky, but σp (18.6%) can be less than a weighted average of σ’s because ρ is not 1.

ICE 3 — CAPM Required Return (Beta → Required Return)

Question

Use CAPM to compute the required return for three stocks.

Input	Value
Risk-free rate, Rf	3%
Expected market return, E[Rm]	11%

Stock	Beta (β)
WMT	0.70
AAPL	1.10
NVDA	2.30

Formula: E[Ri] = Rf + β(E[Rm] − Rf)

ICE 3 Solution (click to reveal)

Show solution

Market risk premium = E[Rm] − Rf = 11% − 3% = 8%

WMT: 3% + 0.70(8%) = 3% + 5.6% = 8.6%

AAPL: 3% + 1.10(8%) = 3% + 8.8% = 11.8%

NVDA: 3% + 2.30(8%) = 3% + 18.4% = 21.4%

Interpretation: Higher β → higher required return because the stock carries more systematic (market) risk.

ICE 4 — Portfolio Beta + CAPM for the Portfolio

Question

You build a 3-asset portfolio. Compute: (1) the portfolio beta βp, and (2) the portfolio required return using CAPM.

Asset	Weight	Beta (β)
WMT	40%	0.70
AAPL	40%	1.10
NVDA	20%	2.30

Input	Value
Risk-free rate, Rf	3%
Expected market return, E[Rm]	11%

Formulas: βp = Σ wiβi and E[Rp] = Rf + βp(E[Rm] − Rf)

ICE 4 Solution (click to reveal)

Show solution

β_p = 0.40(0.70) + 0.40(1.10) + 0.20(2.30) = 0.28 + 0.44 + 0.46 = 1.18

Market risk premium = 11% − 3% = 8%

E[R_p] = 3% + 1.18(8%) = 3% + 9.44% = 12.44%

Interpretation: the portfolio is slightly more aggressive than the market (βp > 1), so its required return is slightly above the market’s required return.

Term Project

We will complete the term project using the dedicated project page. Please use the link below.

Open Term Project Website 8-Stock Risk–Return App

Chapter 8 Quiz

Open Chapter 8 Practice Quiz

Topics: risk vs return, standard deviation, correlation, diversification, beta, CAPM, Security Market Line.

Tools & Links

If you use outside tools, always cite the ticker + your date range.