For a Diversified Portfolio Including a Large Number of Equities

question 33

Multiple Choice

For a diversified portfolio including a large number of equities, the:

• A)weighted average expected return goes to zero.
• B)weighted average of the betas goes to zero.
• C)weighted average of the unsystematic risk goes to zero.
• D)return of the portfolio goes to zero.
• E)return on the portfolio equals the risk-free rate.

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Definitions:

Gross Receivable

The total amount owed to a company for goods sold or services rendered before any deductions for returns or allowances.

Executory Costs

Expenses arising from operational agreements, such as leases, which are not yet settled.

Periodic Lease Rental Payments

Regular payments made by a lessee to a lessor for the use of property, equipment, or vehicles, typically established under a lease agreement.