Individual Investors

question 316

Multiple Choice

Individual investors:

• A) Should expect to earn a rate of return based on the total risk of their portfolios.
• B) Need to own at least 50 stocks if they wish to create a diversified portfolio.
• C) Are responsible for eliminating unsystematic risk.
• D) Can create a portfolio such that the portfolio beta is less than the lowest beta of any security held in the portfolio.
• E) Can generally create a diversified portfolio of risky assets such that the standard deviation of the portfolio equals zero.

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Definitions:

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