For a Diversified Portfolio Including a Large Number of Stocks

question 36

Multiple Choice

For a diversified portfolio including a large number of stocks,:

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

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Definitions:

Working Part

Components of a process or system that are actively engaged in performing a task or function.

Clearly-Defined Career Path

A specific, well-established progression of steps or stages in one's professional life, offering a predictable sequence of advancements and opportunities.

Accounting, OB, And Marketing

Three distinct disciplines within the field of business: accounting focuses on financial reporting, organizational behavior (OB) studies human actions in organizational settings, and marketing deals with the promotion and selling of products or services.

Collective Sense

The shared understanding or common perceptions among a group of individuals, often contributing to a sense of unity or identity.