a. In an efficient market, prices should adjust rapidly to new information. b. A plane crash would be an example of nondiversifiable risk c Under strong form market efficiency, there would be no benefit to trading with non-public 23. Which of the following is false? information. d. A shock to oil prices would be an example of a systematic risk e. The majority of benefits from diversification can be achieved with only about 30 securities. 24. Which of the following stocks is most risky? a. Shark Company; beta 0 b. Dolphin Company, beta 1.5 c. Ray Company, beta-6 d. Fish Company; beta -4 e. Eel Company; beta-1 25. The principle of diversification tells us that: a. Unsystematic risk will be completely eliminated by concentrating an investment in two or three large stocks. b. Some unsystematic risk will be eliminated by spreading an investment across many diverse assets c. Overall risk will be greatly reduced by concentrating an investment in three companies all within the same industry d. Risk wil not be reduced at all if you spread your investment across five diverse companies. e. Systematic risk will be eliminated by spreading an investment across many diverse assets. 26. Which of the following is True? a. Common stock is a debt security. b. Like interest on bonds, dividends are a liability that must be declared and paid c Common shareholders must receive dividends before they can be payed to preferred shareholders. d. The price of a stock should equal the present value of all future dividends. e. Preferred stockholders have the right to vote for the board of directors and on major corporate events