QUESTION 1 The risk premium is ___. Check all that apply: Select one or more: A. normally zero for risky assets B. the reward for bearing risk C. normally positive for risky assets D. the difference between the expected rate of return on an asset and the risk-free rate

QUESTION 2 Diversifiable risk ___. Select one or more: A.can be diversified away B. affects only a single asset or small group of assets C. is measured by standard deviation D. is eliminated in a well-diversified portfolio

QUESTION 3 Which of these statements is most accurate with respect to the use of debt by a start-up fashion retailer with negative cash flow and uncertain revenue prospects? A. Both A and B B. Debt financing will be unavailable or very costly. C. The company will prefer to use equity rather than debt given its uncertain cash flow outlook.