What is the relationship between risk and return on investment (ROI)? What level of risk are you currently able to accept? What are the factors your decision is based on?

 
Unit III Journal
Instructions
What is the relationship between risk and return on investment (ROI)? What level of risk are you currently able to accept? What are the factors your decision is based on?

Unit III Case Study
Instructions

Diversified Risk Stock Portfolio
For this case study, you will 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.

Explain the difference between portfolio risk and stand-alone risk.
Briefly explain why you selected each stock and how this investment portfolio would have less risk than selecting just one stock.
How does risk aversion affect a stock’s required rate of return?
Explain the distinction between a stock’s price and its intrinsic value.