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1)Which of the following statements about the nonsystematic risk of a specific security is/are not true? Select one or more: A

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1)Which of the following statements about the nonsystematic risk of a specific security is/are not true? Select one or more: A. It cannot be diversified away. B. It is higher than systematic risk. C. It is likely to be related to financial market condition. D. It is also called the firm-specific risk. E. It depends on firm's business conditions.

2)Which of the following statements is correct?
A) Agency problems partly arise because of imperfect information and risk aversion.
Agency costs thus can be reduced by improving the flow of information and by reducing risk borne by the managers.
B) Agency problems partly arise because of imperfect information and risk aversion.
Agency costs thus can be reduced by restricting the flow of information and by reducing risk borne by the managers.
C) Agency problems partly arise because of imperfect information and risk aversion. Agency costs thus can be reduced by improving the flow of information and by reducing risk borne by the principals.
D) None of the above.