1.Stock A's beta is 1.5 and Stock B's beta is 0.5. Which of the following statements must be true?

	a.	Stock B is more volatile than the average stock in the existing market.
	b.	Both stocks are less volatile than the average stock in the existing market.
	c.	Both stocks are more volatile than the average stock in the existing market.
	d.	Stock A is more volatile than the average stock in the existing market.

2.

Which of the following is NOT correct?

An investment with high risk should only be undertaken if the expected rate of return is low.

The two types of investment risk are stand-alone and portfolio risk.

The greater the chance of lower than expected, or negative returns, the riskier the investment.

No investment should be undertaken unless the expected rate of return is high enough to compensate for the perceived risk.

3.

Which of the following is true when examining stand alone risk of stock?

All of the above are true.

The higher a potential stock return's standard deviation, the higher the risk.

Standard deviation cannot be used to estimate stand alone risk, only portfolio risk.

The lower a potential stock return's standard deviation, the higher the risk.

4.

Which of the following is true of a probability distribution graph?

		Graphing a probability distrubtion includes listing all possible outcomes and the probability of each occurrence.
		A bar graph and a bell curve can both be used to visualize standard deviation.
		The tighter the probability distribution, the lower the risk.
		All of the above are true.