Which statement is TRUE?

		If you have n indepenednet investments where n is large number, you can create a portfolio for which the total risk is almost zero.
		Systematic risk can be diversified away therefore you don't get compensated for it.
		Idiosyncratic risk can be diversified away therefore you get compensated for it.
		Combining investments that are positively correlated does not provide any diversification benefit.

Which statement is TRUE?

		CAPM is similar to one-factor APT where the factor is the market.
		You canNOT have more than a certain number of factors in APT.
		CAPM does NOT depend on the existance of the market portolio.
		CAPM is more general and less ristrictive than APT.

If we believe in CAPM, ...

		the only risk that matters to us is market risk.
		we MAY demand different expected returns for 2 assets with the same beta.
		we demand compensation (higher return) to take on idiosyncratic risk.
		we do not care about market risk premium.