Part $1.$ Of the options listed below which are examples of undiversifiable risk?

I. Wildfires damage an entire town$$

II$.$ The federal government imposes a $$1000$ fee on all business entities$$

III. Payroll taxes are increased nationally$$

IV$.$ All software providers are required to improve their privacy standards$$

A$.$ I and IV only$$

B$.$ II and III only$$

C$.$ I, III, and IV only$$

D$.$ II and IV only$$

E$.$ I and III only

Part $2.$ The common stock of Alpha Manufacturers has a beta of $1\mathrm{.}24$ and an actual expected return of $13\mathrm{.}95$ percent. The risk$-$free rate of return is $3\mathrm{.}7$ percent and the market rate of return is $11\mathrm{.}78$ percent. Which one of the following statements is true given this information?

A$.$ The actual expected stock return will graph above the security market line.

B$.$ The stock is currently underpriced.

C$.$ To be correctly priced according to CAPM, the stock should have an expected return of $13\mathrm{.}56$ percent.

D$.$ The stock has less systematic risk than the overall market.

E$.$ The actual expected stock return indicates the stock is currently overpriced.

Part $3.$ A proposed project has an initial cost of $74200$ and cash inflows of $23900,34700,$ and $40200$ for years $1$ through $3,$ respectively the required rate of return is $14\mathrm{.}2$ percent. Based on IRR should this project be accepted? Why or why not?

A$.$ No; The IRR equals the required return$$

B$.$ Yes; the irr exceeds the required return$$

C$.$ No$,$ The IRR is less than the required return$($Original Answer was B$,$ I got C$)$

D$.$ Yes, the irr equals the required return$$

E$.$ No; the irr exceeds the required return