According to the Capital Asset Pricing Model, investors are primarily concerned with portfolio risk, not the risks of individual stocks held in isolation. Thus, the relevant risk of a stock is the stock's contribution to the riskiness of a well-diversified portfolio.

True

False

When adding a randomly chosen new stock to an existing portfolio, the higher (or more positive) the degree of correlation between the new stock and stocks already in the portfolio, the less the additional stock will reduce the portfolio's risk.

True

False

You just inherited $100,000. You are investing this money for two years at 0.6% compounding monthly interest rate. In whole dollars, how much money will you have at the end of the two years?

		$116,283
		$122,173
		$112,360
		$115,439

Whats the value of a preferred stock if we assume it has an annual dividend $5 per share and the required rate of return is 8.5%?

		$ 35.0
		$ 62.5
		$ 58.8
		$ 85.0