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1. A portfolio includes a majority of small-company stocks, and their performance is highly volatile Which is true about this portfolio? It has a high

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1. A portfolio includes a majority of small-company stocks, and their performance is highly volatile Which is true about this portfolio? It has a high diversifiable risk It has a high market risk. It has a high risk return rate. O It has a high systemic risk. 2. You are considering a $3.500 investment. The table shows the possible outcomes in cash flow next year. What is the expected rate of return on this asset? Possible Cash Flow $200 Probability 0.3 0.6 0.2 415 875 O 8.39 05.9% O 11.8% O 12.6% 3. You are considering a $7.000 investment. The table shows the possible outcomes in cash flow next year. What is the standard deviation of the returns? Round your answer to the nearest tenth Probability 0.1 012 Possible Cash Flow 5925 680 485 O 1.4% 2.8% 06.0% O 8.1%

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