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Required Return
The minimum rate of return on an investment that is necessary for an investor to consider making that investment.
Market Risk
The risk of losses in positions arising from movements in market prices.
Diversify
The strategy of spreading investments across various financial assets, industries, or other categories to reduce risk.
Capital Asset Pricing Model
A model that describes the relationship between systematic risk and expected return for assets, particularly stocks; it is used to estimate the cost of equity.
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