Reference no: EM132993451

Problem 1: You sell some of your Exxon common stock (which tends to earn the same return every year) and replace it with the common stock of GoldCorp, Inc. (whose shares tend to rise sharply when the economy grows and fall dramatically when the economy is in recession). Your portfolio's beta should

a) increase.
b) decrease
c) either increase or decrease.
d) remain unchanged.
e) definitely exceed the beta of the market when all is said and done.

Problem 2: What is another name for unsystematic risk?

a) firm-specific risk
b) specific risk
c) total risk
d) non-diversifiable risk
e) market risk