11. (TCO 8) Which of the following statements is true regarding systematic risk? (Points : 4) is diversifiable is the total risk associated with surprise events it is measured by beta it is measured by standard deviation 12. (TCO 8) Which statement is true regarding risk? (Points : 4) the expected return is usually the same as the actual return a key to assess risk is determining how much risk an investment adds to a portfolio risks can always be decreased or mitigated by the financial manager the higher the risk, the lower the return investors require for the investment 13. (TCO 8) The stock of Hobby Town has an expected return of 8.8 percent. Given the information below, what is the expected return on this stock if the economy is normal? State of Economy Probability of State of Economy Rate of Return Recession .10 -.09 Normal .70 ? Boom .20 .26 (Points : 4) 3.86 percent 4.42 percent 6.43 percent 7.28 percent 8.21 percent