1. Given the following expected returns and risk, which security will be ranked number one.

   Securities Standard Deviation Expected Return

   QVC 15% 18%

   Apple 30% 40%

   Google 35% 42%

   Ann Taylor 20% 12%

   		QVC, because it has the lowest risk
   		Google, because it has the highest return
   		Apple, because it has the lowest coefficient of variation
   		Ann Taylor, because it has the highest coefficient of variation

1. Winnder Li is considering investing in Ford Motor Company. Which of the followingare examples of diversifiable risk?

   a. Risk resulting from possibility of a stock market crash.

   b. Risk resulting from uncertainty regarding a possiblestrike against Ford.

   c. Risk resulting from an expensive recall of a Ford product.

   d. Risk resulting from interest rates decreasing.

   	I.	a only
   	II.	a and d only
   	III.	b and c only
   	IV.	a, b, c, and d
   	V.	None of the options specified here

1. If we are able to fully diversify, what is the appropriate measure of risk to use?

   	I.	Expected Return
   	II.	Standadard Deviation
   	III.	Coefficient of Variation
   	IV.	Beta
   	V.	All of the options specified here

1. Which of the following has a beta of one?

   	I.	risk-free asset
   	II.	the market
   	III.	All Common stocks
   	IV.	All corporate bonds
   	V.	None of the options specified here