Outlook 2:04 PM more 61% 9. You are trying to diversify your portfolio and reduce risk. Which of the following correlations between the returns of your portfolio and those of a proposed addition would give the most diversification benefit (other things equal)? a. -1 b. +1 c. 0 d. -5 10. Although a company is increasing net income annually, the company continues to reinvest all earnings because of a great need for expansion. This is an example of: a clientele dividend theory b. residual dividend theory c. signaling dividend theory d. bird-in-the-hand dividend theory 11. Measured after the fact, business risk is best measured as: a. the systematic risk of the firm b. the operating leverage of the firm c. volatility added by interest expense d. volatility of operating income 12. Given the following information, calculate the required return on this firm's securities: 1.5 Beta Risk-free rate Market risk premium 6% 9%. a. 10.5% b. 13.5% c. 4.5% d. 19.5% 13. Beta is best described as a measure of a. non-diversifiable risk b. unsystematic risk c. total risk d. diversifiable risk 14 What is the market return given the following information