17 and 18

17. A firm is considering diversify into another line of business. The opportunities available have about the same expected returns, and the firm is interested in lowering its overall risk. The investments and their correlation coefficients are listed below. Which should the firm choose? A. cooper mines, +0.3 B. machinery construction, +0.5 C. toy manufacturing, + 0.7 D. janitorial services, 0 18. In general, risk the number of portfolio components. A. market, declines, larger B. nonsystematic, declines, larger C. nonsystematic, rises, larger D. market, declines, smaller