Short concept: The three questions will be repeated in the n…

Short concept: The three questions will be repeated in the next set.  Pick any two out of the three from the choices below.  If you attempt all, I will grade only the first two.  Use this space to answer 1 of your 2 choices. 1. What is total risk and what are the two components of total risk?  How can this risk be reduced?  When calculating the risk for a 2 or 3 stock portfolio, what are the statistical components you should take into account and why? OR 2.  When calculating the value of a firm for an acquisition of a target firm, what factors would you consider when determining the discount rate for calculating this value? If there are gains of synergy associated with this acquisition, how will the acquiring firm account for this in their valuation of the target? OR 3.  Your firm is considering cutting dividends due to a recent downturn in your industry.  With the knowledge gained from your recent Corporate Finance class, how would you present the pros and cons to changing dividend policy to your management team/and or shareholders?