1. Describe the various types of risk to which investors are exposed. 2. What is meant by the risk-return trade-off? What is the risk-free rate of return? 3. Briefly describe the two basic sources of...

1. Describe the various types of risk to which investors are exposed.

2. What is meant by the risk-return trade-off? What is the risk-free rate of return?

3. Briefly describe the two basic sources of return to investors.

4. What is interest on interest, and why is it such an important element of return?