... to the ability of these com-panies to generate cash flow. But, as you will see throughout this book, a companycan generate cash flow only if it also creates value for its customers, employees, ... three-stock portfolio. Because diversificationlowers risk, most stocks are held in portfolios.The textbook’s web sitecontains an Excel file thatwill guide you through thechapter’s calculations. Thefile ... return ϭAmount received Ϫ Amount investedAmount investedStand-Alone Risk 103 Risk and Return 101 horses, you are risking your money. If you invest in speculative stocks (or, really, anystock),...