My question is Q 1 , diversifiable and nondiversifiable risks, thank you !

E(R) = R + [E(R) - R1XB. 24% = 8% + (16% -89) XB B. = 16%/8% = 2.0 REVIEW AND CRITICAL THINKING QUESTIONS terms, why is some risk ow that an investor 1. Diversifiable and Nondiversifiable Risks [LO3] In broad terms, why is son diversifiable? Why are some risks nondiversifiable? Does it follow that an can control the level of unsystematic risk in a portfolio, but not the level of systemer risk? Information and Market Returns (LO3] Suppose the government announces that, based on a just completed survey, the growth rate in the economy is likely to be 2 percent in the coming year, as compared to 5 percent for the past year. Will secu rity prices increase, decrease, or stay the same following this announcement? Does it make any difference whether the 2 percent figure was anticipated by the market? Explain. 3. Systematic versus Unsystematic Risk [LO3] Classify the following events as mostly systematic or mostly unsystematic. Is the distinction clear in every case? a. Short-term interest rates increase unexpectedly. b. The interest rate a company pays on its short-term debt borrowing is increased by its bank. c. Oil prices unexpectedly decline. d. An oil tanker ruptures, creating a large oil spill. e. A manufacturer loses a multimillion-dollar product liability suit. 1. A Supreme Court decision substantially broadens producer liability for injuries suffered by product users. 4. Systematic versus Unsystematic Risk (LO3] Indicate whether the following events might cause stocks in general to change price, and whether they might ca Big Widget Corp.'s stock to change price: a. The government announces that inflation unexpectedly jumped by 2 perce month. 1. Big Widget's quarterly earnings report, iust issued, generally fell in line w alysts' expectations. c. The government reports that economic growth last year was at 3 percent generally agreed with most economists' forecasts. ed, generally fell in line with an- I was at 3 percent, which