1. FIGURE 12-1 Walgreens and Microsoft Stock Prices, 1996–2001 Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-01

2. TABLE 12-1 Finding the Variances for the Returns on Walgreens and Microsoft Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table 12-01

3. FIGURE 12-2 Normal Distribution Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-02

4. TABLE 12-2 Distribution of Returns for Walgreens and Microsoft Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table 12-02

5. TABLE 12-3 Historical Returns and Standard Deviations of Returns from Different Assets, 1996–2000 Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table 12-3

6. FIGURE 12-3 Price Reactions in Efficient and Inefficient Markets* Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-03

7. FIGURE 12-4 Stock Market Average Price Reaction to Positive and Negative Earnings Surprises Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-04

8. TABLE 12-4 Portfolio Return Calculations Based on 50% Investment in Walgreens and 50% in Microsoft Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table 12-04

9. FIGURE 12-5 Portfolio Returns When Investments Are Equally Weighted Between the Two Stocks Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-05

10. FIGURE 12-6 Benefits of Diversification: Combining Two Risky Assests May Lead to Lower Portfolio Risk Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-06 (Figure continues on next slide)

11. FIGURE 12-6 (Continued) Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-06 continued

12. TABLE 12-5 Diversification Example Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table 12-05

13. FIGURE 12-7 Risk and Portfolio Diversification Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-07

14. FIGURE 12-8 Systematic and Unsystematic Risk Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-08

15. FIGURE 12-9 Comparing Asset Returns Over Time with Those of the Market Portfolio Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-09 (Figure continues on next slide)

16. FIGURE 12-9 (Continued) Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure 12-09 continued

17. TABLE 12-6 Example of Stock Betas Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table 12-06

18. FIGURE LE12-1 Graph of R i = a + b R MKT + e Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure LE12-01

19. FIGURE LE12-2 Plots of Returns for Microsoft and the S&P 500 Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure LE12-02

20. TABLE LE12-1 How to Calculate a Beta Coefficient or Measure of Systematic Risk Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Table LE12-01

21. FIGURE LE12-3 Security Market Line Melicher & Norton/Finance: Introduction to Institutions, Investments, and Management, 11th edition Chapter 12, Figure LE12-03