Which of the Following Statements Is CORRECT

question 65

Multiple Choice

Which of the following statements is CORRECT?

• A) A two-stock portfolio will always have a lower standard deviation than a one-stock portfolio.
• B) A portfolio that consists of 40 stocks that are not highly correlated with "the market" will probably be less risky than a portfolio of 40 stocks that are highly correlated with the market,assuming the stocks all have the same standard deviations.
• C) A two-stock portfolio will always have a lower beta than a one-stock portfolio.
• D) If portfolios are formed by randomly selecting stocks,a 10-stock portfolio will always have a lower beta than a one-stock portfolio.
• E) A stock with an above-average standard deviation must also have an above-average beta.

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Definitions:

Societal Pressure

The influence exerted by the society on individuals or organizations to conform to certain norms, values, or behaviors.

"As Is" Process

The documentation or mapping of a process or system exactly as it currently operates, without any modifications or improvements.

Process Resources

Assets, personnel, information, and equipment required to perform and manage process activities within an organization.

BPI Team

Business Process Improvement Team, a group dedicated to analyzing business processes and implementing strategies to improve them.