1A) Your spouse/significant other asks you about the concept of risk and return. Which of the following statements would you not want to tell them?

	a.	Modern portfolio theory suggests that investors are rewarded in terms of the risk-return trade-off for holding a diversified portfolio of securities across a variety of asset classes.
	b.	Investors that are willing to hold an asset riskier than the risk-free security should be entitled to a market premium.
	c.	There is no risk in investing all your assets into the risk-free Treasury bill.
	d.	In efficient markets you need to be willing to take higher potential risk for higher potential return.

1B) What term best describes an unsystematic risk

	a.	Market
	b.	Chaotic
	c.	Diversifiable
	d.	Uncontrollable

1C) Which of the following investments provides the least variability and risk?

	a.	Investment D: Avg. return = 12%, std. deviation = 8%
	b.	Investment B: Avg. return = 12%, std. deviation = 5%
	c.	Investment C: Avg. return = 8%, std. deviation = 2%
	d.	Investment A: Avg. return = 25%, std. deviation = 18%

1D) What is represented by the market beta ()?

	a.	Correlation of the market to the GNP
	b.	Standard deviation for the market
	c.	Relative price volatility of a stock due to market movement
	d.	Risk represented by the market