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.

---

Definitions:

Secondary Labour Market

The segment of the labor market characterized by lower pay, less job security, and fewer benefits compared to the primary labor market, often filled with high turnover, part-time, or temporary jobs.

Social Hierarchy

The organization of individuals into various levels based on factors like status, class, or authority, influencing their social interactions and opportunities.

Types of Authority

Various forms of power or control recognized by individuals or society, such as legal authority, traditional authority, and charismatic authority.

Weber

Refers to Max Weber, a German sociologist, philosopher, and political economist known for his theory that religion significantly impacted the economic development, specifically in the West.