We Would Almost Always Find That the Beta of a Diversified

question 64

True/False

We would almost always find that the beta of a diversified portfolio is less stable over time than the beta of a single security.

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Definitions:

Proprietorship

A form of business organization owned by a single individual who is responsible for its debts and entitled to its profits.

Personal Tax Rate

The percentage at which an individual's income is taxed by the government.

Limited Liability

A legal structure that limits the financial liability of company owners to the amount they have invested in the company.

Debt Instrument

A paper or electronic obligation that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract.