For a Portfolio of 40 Randomly Selected Stocks,which of the Following

question 25

Multiple Choice

For a portfolio of 40 randomly selected stocks,which of the following is most likely to be true?

• A) The riskiness of the portfolio is greater than the riskiness of each of the stocks if each was held in isolation.
• B) The riskiness of the portfolio is the same as the riskiness of each stock if it was held in isolation.
• C) The beta of the portfolio is less than the weighted average of the betas of the individual stocks.
• D) The beta of the portfolio is equal to the weighted average of the betas of the individual stocks.
• E) The beta of the portfolio is larger than the weighted average of the betas of the individual stocks.

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Definitions:

Interpersonal Skill

The ability to interact effectively and harmoniously with other people.

Professional Relationships

The interactions and connections formed between individuals in a work setting based on mutual respect, trust, and common goals.

Accounting Practice

The systematic process of recording, measuring, and communicating financial information about economic entities.

Reverse Networking

The process of establishing connections by presenting oneself as a resource to others, rather than seeking help or resources from them.