In a Portfolio of Three Randomly Selected Stocks, Which of the Following

question 57

Multiple Choice

In a portfolio of three randomly selected stocks, which of the following could NOT be true, i.e., which statement is false?

• A) The riskiness of the portfolio is less than the riskiness of each of the stocks if they were held in isolation.
• B) The riskiness of the portfolio is greater than the riskiness of one or two of the stocks.
• C) The beta of the portfolio is lower than the lowest of the three betas.
• D) The beta of the portfolio is higher than the highest of the three betas.
• E) None of the above statements is obviously false, because they all could be true, but not necessarily at the same time.

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