1.Explain the difference between idiosyncratic or firm-specific risk, and market or systematic risk.
2. Assume the CAPM holds, and you are given the following values:
Expected return on Malware stock = 12%
Risk-free rate = 3%
Beta of Malware stock = 2
What is the expected return on the market? Please give formula, show work and your calculation.
3.Explain the difference between a general obligation bond and a revenue bond.
4.What is the face value of a zero coupon bond that has a yield of 8.5%, matures in 6 years, and is currently selling for $404.54? Round your answer to the nearest dollar. Please give formula, show work and your calculation.
Q1Idiosyncratic risk refers to the possibility that the price of an asset may decline due to anevent that could specifically affect that asset but not the market as a whole. In short,…