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:

Civil Society

The sphere of social life that is open to public participation and forms independently of the state, including organizations, movements, and clubs.

Services

Intangible products provided to consumers or businesses, involving human or mechanical effort.

Multinational

A company that operates in several countries, managing production or delivering services in more than one country.

Autonomous

The ability to operate independently or self-govern, often referring to systems, machines, or organizations that do not require external control or intervention.