The problem with the constant dividend payout ratio is
A) management cannot decrease the dividend when times are tough.
B) management is reluctant to cut the dividend even if there are low profits that year.
C) the dollar amount of the dividend fluctuates from year to year.
D) investors may come to expect a specified amount.
Question 2
________ risk affects all stocks to a greater or lesser extent and is due to large macroeconomic shocks. This type of risk ________ be eliminated through diversification.
A) Systematic; can
B) Systematic; cannot
C) Unsystematic; can
D) Unsystematic; cannot
E) None of the above
