The _________________ the risk of an investment, the ________________ the return of an investment

		greater;lower
		lower,greater
		greater, greater
		lower, lower.

1. Portfolio return is based on the expected average return of the individual securities in the portfolio. However, the risk of a portfolio is not the average risk of the individual secuties. This is because of:

   		asset allocation
   		correlation
   		variance
   		none of the answers are correct

1. Since ROE will increase with added debt, it is corect to say that for all firms, ROE will always exceed ROA.

   True

   False