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

question 124

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 of the stocks if each was held in isolation.
• C)The beta of the portfolio is less than the average of the betas of the individual stocks.
• D)The beta of the portfolio is equal to the average of the betas of the individual stocks.

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Definitions:

Native Species

Organisms that are naturally occurring in a region or habitat without human intervention, adapted to local environmental conditions over time.

Specialist Species

Organisms adapted to thrive in a specific habitat or to utilize a narrow range of food sources, making them vulnerable to changes in their environment.

Habitat Loss

The destruction or degradation of natural environments, leading to the decline of plant and animal species.

Pollution

The introduction of contaminants into the natural environment causing adverse change, through substances or energy.