Question: 5) Hedging is useful when faced with A) idiosyncratic risk. B) systemic risk. C) systematic risk. D) Both A) & C) are correct. 6) Reducing

5) Hedging is useful when faced with A) idiosyncratic risk. B) systemic risk. C) systematic risk. D) Both A) \& C) are correct. 6) Reducing risk by choosing investments with payoffs that have no correlation is called: A) risk mitigation. B) risk premiums. C) hedging risk. D) spreading risk. 7) Diversification: A) includes hedging and spreading risk. B) includes hedging risk, but not spreading risk. C) includes spreading risk, but not hedging risk. D) includes neither hedging risk nor spreading risk

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