1. Which one of the following risks is irrelevant to a well-diversified investor?
unsystematic risk
nondiversifiable risk
systematic risk
market risk
2. The risk-free rate of return is 3.9 percent and the market risk premium is 6.2 percent. What is the expected rate of return on a stock with a beta of 1.21?
10.92%
12.22%
11.40%
12.79%