1 Unsystematic risk:
I. is also called unique risk.
II. is also called asset-specific risk.
III. affects a limited number of assets.
IV. affects a large number of assets.
A. I, II, and III only
B. II and IV only
C. I and IV only
D. I, II, and IV only
E. I and III only
2. What is the benefit of diversification? What is the general condition under which diversification will have benefits? Briefly explain why.