Reference no: EM132966179

Create a portfolio of five to eight stocks that demonstrate diversified risk. List the stocks along with their current price and previous 1-year and 5-year rates of return. Below the list of stocks, address the issues described below.

Problem 1: Explain the difference between portfolio risk and stand-alone risk.

Problem 2: Briefly explain why you selected each stock and how this investment portfolio would have less risk than selecting just one stock.

Problem 3: How does risk aversion affect a stock's required rate of return?

Problem 4: Explain the distinction between a stock's price and its intrinsic value.