Which of the following is true about forming a portfolio of two stocks when the correlation coefficient between them is equal to 0.00?

		The portfolio has some potential to diversify risk.
		The portfolio has no potential to diversify risk.
		The portfolio has maximum potential to diversify risk.
		None of the Above

Coolmist is a company that produces high quality juices from scratch. One of their best products is orange juice, and they have orange groves that provide the chief raw material to their operations. One of the risks faced by the company is that the growing process from start (planting) to finish (extraction of juice) takes many months, and because they have no control over the global price of orange juice, their business has significant price risk. Coolmist is considering the use of options on the price of orange juice per pound as a way to hedge this risk. Which of the following option positions would you recommend?

		Buy straddles on orange juice
		Write puts on orange juice
		Buy calls on orange juice
		Buy puts on orange juice
		Write calls on orange juice

The beta of a security that has zero covariance with the market would be equal to which of the following values?

		Negative one
		Less than zero
		One
		Less than one
		Zero