When purchasing common stock, an investor assumes:

A.market/diversifiable or non-market/undiversifiable risk

B.market/undiversifiable or non-market/diversifiable risk

C.non-market/diversifiable or market/diversifiable risk

D.market risk

Suppose an investor invests $2,000 in a Certificate of Deposit which earns eight percent compounded quarterly. What is the value of the CD in five years

A.$2,208

B.$2,939

C.$2,800

D.$2,972

E.None of the above

To deal with undiversifiable risk you could:

A.require higher returns from investments with higher risks

B.require lower returns from investments with higher risks

C.require higher returns from investments with lower risks

D.none of the above