1.) XTC Inc. has a beta = 1.05. Is this stock more risky or less risky than the market as a whole? If the market index increases in value by 15%, by how much do we expect XTC to change?

2.) MXC Inc. has a beta = 0.91. Is this stock more risky or less risky than the market as a whole? If the market index decreases in value by 11%, by how much do we expect XTC to change?

3.) You are considering three investments: A, B, and C. Their correlations are: _A,B = 0.75; _B,C = 0.19; _A,C = 0.42. Which two investments held together would provide the most efficient diversification?