Which of the following is true of portfolio diversification?

• A diversified portfolio containing positively correlated investments has a higher variance than a portfolio containing a single asset type.

• A diversified portfolio containing negatively correlated investments has a higher variance than a portfolio containing a single asset type.

• A diversified portfolio containing positively correlated investments has a lower variance than a portfolio containing a single asset type.

• A diversified portfolio containing negatively correlated investments has a lower variance than a portfolio containing a single asset type.

You own a small manufacturing business that produces widgets. You have spent $150,000 acquiring the fixed assets you need to produce widgets. Each widget costs you $2 to make and they sell for $15 each, so your variable cost is 13.3% of the overall revenue. At your current level of operating leverage, how many widgets must you sell to break even?

• 19,950

• 11,539

• 10,000

• 13,482

A stock's beta, which can be affected by surprise news or announcements, is a measure of its __________ in relation to a benchmark like an index fund.

• yield

• credit rating

• volatility

• price

Which of the following is a tenet of semi-strong-form efficiency?

• Share prices respond immediately to new information that is made public.

• Some forms of fundamental analysis can provide investors excess returns.

• Historical data can be used to generate excess returns in the present day.

• Individual investors can "beat" the market if enough information is made public.