#1 Which is the correct statement?

• A. The greater the expected risk taken, the greater the return earned.
• B. The greater the return, the greater the risk that must be taken.
• C. The greater the expected risk taken, the greater the expected return given.
• D. The greater the expected return, the greater the risk that must be taken.

#2

Which statement is false?

• A. A company must reinvest all earnings back into the company.
• B. You buy gas for your car at spot.
• C. Bid Ask
• D. A high P/E ratio generally indicates that a stock is riskier than if the P/E ratio were low.
• E. Stocks in the Dow 30 are all large-cap.

#3 Which statement is correct?

• A. An IPO is carried out pursuant to regulations under the Securities Exchange Act of 1934.
• B. Common stock cannot have a beta that is less than zero.
• C. Systematic risk is reduced through portfolio diversification.
• D. None of the above are correct.