Assume That Two Investors Each Hold a Portfolio, and That

question 74

True/False

Assume that two investors each hold a portfolio, and that portfolio is their only asset.Investor A's portfolio has a beta of minus 2.0, while Investor B's portfolio has a beta of plus 2.0.Assuming that the unsystematic risks of the stocks in the two portfolios are the same, then the two investors face the same amount of risk.However, the holders of either portfolio could lower their risks, and by exactly the same amount, by adding some "normal" stocks with beta = 1.0.

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Steal

The act of taking something without permission or legal right and without intending to return it.

Consumer

An individual or group who uses goods and services produced within an economy.

Specific Product

A particular good or service that is distinct because of its brand, model, or other identifying characteristic.

Lower Price

A decrease in the cost at which goods or services are sold, often resulting from factors like increased supply or decreased demand.