1a) Many former employees at Monster Energy, an energy trading and supply company, had a large part of their portfolio invested in Monster Energy's stock. These employees were bearing a high degree of ________ risk.

a) non-diversifiable

b) systematic

c) market

d) unique

1b) You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns of these two securities?

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
		Stock A				Stock B
Normal	.75		.13				.16
Recession	.25		.05				.21