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

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

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

Correct A investor$$s exposure to market risk can be diversified away by holding approximately $40$ randomly$-$selected securities in an investor$$s portfolio.

Points:

$0\mathrm{.}67/1$

$2.$ 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.

Correct An investor will assess the riskiness of a security, and then determine his or her appropriate rate of return.

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

Points:

$1/1$

$3.$ Which statement is correct?

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

Incorrect 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.

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.

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