1. Which of the following statements is correct? O The fact that an investment generates a negative return implies that the investor has badly selected or managed their investments O The use of a security's historical standard deviation to estimate its future riskiness is a theoretically sound financial practice. O The use of a security's historical prices and returns to predict its estimated future return is theoretically sound O An investment exhibiting a greater amount of risk will always return a higher actual return. 2. In general, it is reasonable to expect that holding a portfolio consisting of both international and domestic assets, rather than domestic stocks alone will provide greater risk-reduction benefits due to which of the following factors? O The differing economic, regulatory, and political systems expose domestic and international securities to different, and potentially ofsetting, sources and amounts of diversifiable and market risks. This can cause the securities to generate independent or offsetting patterns of returns. O The differing economic, regulatory, and political systems expose domestic and international securities to different, and potentially offsetting, sources and amounts of market risks. While the domestic and foreign companies share common sources of diversifiable risk, the differences in market risk can still cause their patterns of returns to differ sufficiently to offer small risk-reduction benefits. 3. Two securities, A and B, are expected to be worth $100.00 in one year. Because A is riskier than B, the current price of A should be the current price of B