higher. higher d, None of the above is correct sytemania risk. is a measure of total risk, whereas is a Standard deviation beta b, Beta: standard deviation Standard deviation: variance d. Coefficient of variation: standard deviation None of the above is Assume you are considering combining two investments to form a portfolio and you are very with the risk that wi from the combination If you want to attain the great 9, effect from diversification, you would prefer that the assets are Positively b. Negatively d. The relationship between the two investments gives no indication of the diversification effect that will result by combining them to form a portfolio. e. Diversification is not an important factor in investment decisions. 20. Beta of the market portfolio is: b, +0.5 21. If Amazon has a beta coefficient, equal to 1.06, the risk premium associated with the market is 1 percent, and the risk-free rate is 1 percent, application of the capital asset pricing model indicates the appropriate return should be a. 7.36% b. 7.42% c. 8.36 d, 8.42% e. None of the above is correct. 22. John Smith currently has an investment portfolio with a total value equal to S80,000. The has portfolio has a beta equal to 1.4. John wants to invest an additional S20,000 in a stock that Beta- 2.4. After John adds the new stock to his portfolio, what will be the portfolio s beta? a. 1.6 b. 1.9 c. 2.0 portfolio's beta. d. Not enough information is given to compute the e. None of the above is correct. 23. The following are measures used by firms when making capital budgeting decisions except A. Payback period B. Internal rate of return