$1.$ Which of the following statements is correct? Check all that apply.

a$.$ Non$-$systematic risk reflects the risk that remains after an investor has diversified his or her portfolio.

b$.$ The practice of diversification can effectively reduce an investor$$s company$-$specific risk.

c$.$ Possible sources of market or non$-$diversifiable risk include inflation and commodity price changes, changes in currency exchange rates, and fluctuations in interest rates.

$2.$ The phenomena and behaviors discussed above are based on the assumption that the majority of investors are risk averse. According to the concept of risk aversion, Check all that apply.

a$.$ A risk$-$averse investor will prefer an investment that offers a $7\%$ return with a standard deviation of $2\%$ to an alternative investment that offers a $7\%$ return with a standard deviation of $4\%.$

b$.$ An investor will assess the rate of return offered by a security, and then determine the corresponding riskiness of the security.

$3.$ Which statement is correct?

a$.$ The addition of an asset to a portfolio, when the correlation coefficient between the asset$$s and portfolio$$s returns is $+1,$ will reduce the riskiness of the portfolio.

b$.$ The addition of an asset to a portfolio, when the correlation coefficient between the asset$$s and portfolio$$s returns is $-1,$ will increase the riskiness of the portfolio.

c$.$ It is theoretically possible to create a portfolio that offers a positive return and whose standard deviation is zero.

d$.$ It is theoretically impossible to create a portfolio that offers a positive return and a standard deviation of zero.