Which of the following is the most correct? Choose one: a. Adding a market portfolio to a portfolio containing a beta of 0.9 increases its systematic risk. b. The level of unsystematic risk in the portfolio cannot be affected by diversification. c. A company's unsystematic risk must be assessed to measure how sensitive an enterprise is to economic cycles. d. On the effective front, systematic risk is decentralized.

Which of the following is the most correct?

Choose one:

a. One typical conflict of interest arises from the fact that the management of a company has no incentive to maximize the remuneration it receives. b. One typical conflict of interest arises from the fact that the management of a company wants to take too little risk from the point of view of its owners. c. Shareholders typically want to take a moderate risk compared to creditors because shareholders may lose all of the capital they invest in bankruptcy. d. From a creditors perspective, it pays to increase a companys unsystematic risk when possible because they are typically well diversified in their investments.