Which of the following statements regarding investment risk is correct?

1.. Beta is a measure of systematic, non-diversifiable risk.

2.. Rational investors will form portfolios and eliminate systematic risk.

3.. Rational investors will form portfolios and eliminate unsystematic risk.

4.. Systematic risk is the relevant risk for a well-diversified portfolio.

5.. Beta captures all the risk inherent in an individual security.

a. 1 and 5.

b. 2 and 5.

¢. 1, 3 and 4.

d. 2, 3 and 4.