14a) You work as an analyst for a large charitable trust, and part of your job is to evaluate assets to add to the trusts investment portfolio. You have your eye on two stocks. The stock of The Towel Company has an expected return of 13% and the stock of Block and Tackle has an expected return of 30%. If you decide to split the trusts investment by putting 49% of your fund into The Towel Company and 51% in Block and Tackle, what would the expected return for your portfolio be? (Round to 2 decimals, and answer as a percentage.)

Select one:

a. 23.77 %

b. 19.47 %

c. 21.67 %

d. 24.07 %

e. 19.33 %

14b)

State i	Probability of State i	Actual Return of HCA
Boom	99 %	33 %
Bust	1 %	2 %

Given the preceding information, calculate the standard deviation of HCA? (Answer as a percentage) (Round to 2 decimals)

Select one:

a. -0.88 %

b. 3.08 %

c. 0.47 %

d. 6.01 %

e. 5.95 %

14c) It is often said that you can reduce your investment risk by creating a portfolio of stocks rather than investing in a single stock. This concept is referred to as diversification. Diversification significantly reduces some component of the total risk (also referred to as diversifiable risk). What is the name of the basic risk concept that we can not reduce through diversification?

Select one:

Interest rate risk

Non-systematic (unique) risk

Foreign exchange risk

Systematic (market) risk

Labor risk