Which one of the following statements applies to idiosyncratic risk?

	a.	It can be eliminated through portfolio diversification.
	b.	It is also called market risk.
	c.	Investors receive a risk premium as compensation for accepting this risk.
	d.	It is a type o risk that applies to most, if not all, securities.
	e.	This risk is related to expected returns.

1. Suppose Lena has a choice among three mutually-exclusive retirement funds. Below are the expected return and standard deviation for each choice.

   Fund	E[R]	SD[R]
   A	0.2	0.2
   B	0.2	0.25
   C	0.13	0.2

   If Lena is a _____1_____ investor, she would choose fund A over B.

   If Lena is a _____2_____ investor, she would choose fund A over C.

   	a.	1. risk-averse, 2. non-satiated
   	b.	none of the above
   	c.	1. non-satiated, 2. risk-seeking
   	d.	1. risk-seeking, 2. non-satiated
   	e.	1. non-satiated, 2. risk-averse

2. Nio Corporation has semi-annual coupon bonds on the market with 10 years to maturity, a YTM of 6 percent, and a current price of $970. What must the coupon rate be on the companys bonds?

   	a.	7.23%
   	b.	13.04%
   	c.	11.18%
   	d.	5.30%
   	e.	5.60%