1.

Unsystematic ____ be diversified, while systematic risk ____ be diversified

A.

cannot; can

B.

can; cannot

C.

can; can;

D.

cannon; cannot;

2.

If a company has a preferred stock price of $10 and a preferred cost of equity capital of 5% then the company's preferred stock dividend must be $0.5 per share.

True

False

3.

An investor forms a portfolio comprised of Stock A and Stock B. Stock A has an expected return of 2% while Stock B has an expected return of -1%. If the investors splits her money equaly across the two stocks (i.e. 50-50 weights) what would be the expected return of her portfolio?

A.

-1%

B.

0%

C.

0.5%

D.

1%