10. If a share return is higher than is justified by the share's beta, then which of the following will restore market equilibrium? a. Fall in the share's price, rise in share return. b. Rise in the share's price, fall in share return. Fall in the share's price, fall in share return. d. Rise in the share's price, rise in share return. C. 11. All things equal, diversification is most effective when a. securities' returns are positively correlated. b. securities' returns are uncorrelated. c. securities' returns are high. d. securities' returns are negatively correlated. e. securities' returns are low Use the following expectations on Stock X and Y to answer the following 2 questions Bear Market 20% -20% 15% Normal Market 50% 18% 20% Bull Market 30% 50% 10% Probability Stock X Stock Y 12.. What are the expected returns for Stocks X and Y? Stock Y Stock X 5% a. 18% b. 18% 12% C. 20% d. 20 % 11% 10% 13. Assume that of your $10,000 portfolio, you invest $9,000 in Stock X and $1,000 in Stock Y What is the expected return on your portfolio? a. 18% b. 19% c. 20% d. 23% 14. Which of the following is a source of unsystematic risk? a. Interest rates b. Business cycle c. Energy Prices d. Introduction of a bad product is a measure of the tendency of the returns to move together. 15. The a. Variance Covariance Standard deviation d. Absolute deviation b C