A) The principle of diversification tells us that: Concentrating an investment in two or three large stocks will eliminate all of your risk. Concentrating an investment in two or three large stocks will reduce your overall risk Spreading an investment across many diverse assets cannot (in an efficient market) eliminate any risk. Spreading an investment across many diverse assets will eliminate all of the risk Spreading an investment across many diverse assets will eliminate some of the risk 10. Which of the following must total to 100 percent? I. rates of return for the various economic states II. portfolio weights III, probabilities of occurrence for the various economic states IV. betas of the individual securities held within a portfolio A). I and III only B). II and IV only C). II and III only D). II, III, and IV only E). I, II, III, and I Which of following statements is correct, everything else equal? A) A callable bond will have the higher coupon than a non-callable bond. B) A secured bond will have the higher coupon than a debenture. c) A senior bond will have the higher coupon than a subordinated debenture. D) A bond with a sinking fund will have the higher coupon than a bond without a sinking fund. E) None of them is correct. One year ago, you purchased 500 shares of stock for $12 a share. The stock pays $0.22 a share in dividends each year. Today, you sold your shares for $28.30 a share. What are your total dollar return and percentage return on this investment A. $6,222; 112.34% B. $7,432; 118.67% C. $8,150; 128.32% D. $7,775; 145.68% E. $8,260; 137.67%