Which of the Following Statements Is CORRECT

question 112

Multiple Choice

Which of the following statements is CORRECT?

• A) A portfolio with a large number of randomly selected stocks would have more market risk than a single stock that has a beta of 0.5, assuming that the stock's beta was correctly calculated and is stable.
• B) If a stock has a negative beta, its expected return must be negative.
• C) A portfolio with a large number of randomly selected stocks would have less market risk than a single stock that has a beta of 0.5.
• D) According to the CAPM, stocks with higher standard deviations of returns must also have higher expected returns.
• E) If the returns on two stocks are perfectly positively correlated and these stocks have identical standard deviations, an equally weighted portfolio of the two stocks will have a standard deviation that is less than that of the individual stocks.

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Definitions:

Intercultural Communication

The process of exchanging meaningful information across cultural boundaries in a way that preserves mutual respect and minimizes misunderstanding.

Electronic Communication

The transfer of information or messages over digital platforms or devices, such as email or social media.

Baby Boom Generation

The demographic group born during the post-World War II baby boom, approximately between the years 1946 and 1964.

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