Which of the Following Statements Is CORRECT

question 109

Multiple Choice

Which of the following statements is CORRECT?

• A) 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.
• B) A two-stock portfolio will always have a lower beta than a one-stock portfolio.
• C) If portfolios are formed by randomly selecting stocks, a 10-stock portfolio will always have a lower beta than a one-stock portfolio.
• D) A stock with an above-average standard deviation must also have an above-average beta.
• E) A two-stock portfolio will always have a lower standard deviation than a one-stock portfolio.

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Definitions:

Bed Rest

A medical recommendation to restrict activities and remain lying down for most of the day to promote healing or recovery.

Dyspnea

Difficulty or discomfort in breathing, often described as shortness of breath.

Hemorrhage

Excessive bleeding or blood loss, either internally or externally.

Low-molecular-weight Heparin

A medication used to prevent and treat blood clots, characterized by its lower molecular weight compared to standard heparin, resulting in more predictable effects.