Which of the Following Statements Is CORRECT

question 92

Multiple Choice

Which of the following statements is CORRECT?

• A) 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.
• B) 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.
• C) If a stock has a negative beta,its expected return must be negative.
• D) 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.
• E) According to the CAPM,stocks with higher standard deviations of returns must also have higher expected returns.

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Definitions:

Urinary System

The organ system responsible for producing, storing, and eliminating urine.

Void

(1) To pass urine from the urinary bladder; to make ineffective or invalid; (2) By writing VOID across the front of a check it “disables” the check so it cannot be used.

Salpingitis

An inflammation of the fallopian tubes, which can be caused by infection and may lead to infertility if left untreated.

Fallopian Tube

One of a pair of tubes along which eggs travel from the ovaries to the uterus in the female reproductive system.