Q1. The risk associated with common stock is related, in part, to the volatility of the firm's cash flows.

True/false

Q2. Standard deviation and variance are both used to "describe" the distribution of stock returns. Variance is not the preferred metric because it is stated in terms of squared percentages.

True/False

Q.3 When adding a stock to a portfolio, the degree of risk reduction to the portfolio depends on both the weight of the stock in the portfolio and the correlation of its returns to those of the other stocks in the portfolio.

True/False