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.

---

Definitions:

Fraudulent Misrepresentation

False statements or claims made knowingly with the intention of deceiving another party, leading them to enter into a contract or agreement.

Undue Force

Excessive or inappropriate use of physical or psychological pressure in an attempt to influence someone's actions.

False Imprisonment

The act of restraining a person against their will in a bounded area without any legal authority to do so.

Shoplifting

Shoplifting involves the unauthorized removal of goods from a store without payment.