1. There is no risk in a world of certainty.

	a.	True
	b.	False

2. Realized returns frequently differ from expected returns.

	a.	True
	b.	False

3. The standard deviation measures an asset's expected return.

	a.	True
	b.	False

4. The larger the standard deviation of an investment's return, the larger is the investment's risk.

	a.	True
	b.	False

5. Unsystematic risk is the tendency for stock prices to move together.

	a.	True
	b.	False

6. Systematic risk is reduced through portfolio diversification.

	a.	True
	b.	False

7. A beta coefficient is an index of an asset's unsystematic risk.

	a.	True
	b.	False

8. A beta of 2.0 indicates an asset's return is more volatile than the market.

	a.	True
	b.	False

9. The numerical value of a stock's beta tends to be stable over time.

	a.	True
	b.	False

10. An aggressive investor will tend to prefer stocks with high betas during rising markets.

	a.	True
	b.	False

11. A portfolio consisting of securities that are highly correlated is well diversified.

	a.	True
	b.	False