a. Which of the following statements is CORRECT? Market risk is important, but it does not have a direct effect on stock prices because it only affects beta. Well-diversified stockholders do not need to consider market risk when determining required rates of return. Sensitivity analysis is a good way to measure market risk because it explicitly takes into account diversification effects. Scenario analysis explicitly takes into account the probability of specific effects occurring, whereas sensitivity analysis cannot account for d. probabilities. Ob. c