Chapter 7 - Definition risk

Question 1

Whats the 3 kinds of notes in a portfolio usually?

Answer 1

1. US Treasury Bills
2. US Treasury Bonds
3. Common Stocks

Question 2

Hows the Discount-rate calculated as an average risk for projects?

Answer 2

(expected) return of a market portfolio (denoted (rm)) is:

rm= rf + average risk premium