Describe the types of risk that an investor takes on by having a portfolio of stocks. Also discuss how the risk can be measured. Audio Partners has only a passing familiarity with the capital asset pricing model (CAPM). How would you describe the formula to your client in a way that someone without a finance background would understand? Include a discussion of the role of beta in the formula and describe how beta measures the risk of a stock. What can Audio Partners do to reduce risk and maximize return on investments? Are start-ups in a precarious position when considering risk?