1. We routinely assume that investors are risk-averse return-seekers; i.e., they like returns and dislike risk. If so, why do we contend that only systematic risk and not total risk is important?
2. A corporation has a stock price of $150 per share today. If it has a "5-for-4" stock split that is effective tomorrow, what would happen to the stock price?
a. It would rise to $180.
b. It would fall to $148.75
c. If would fall to $120.
d. It would rise to $187.50.