Which of the Following Statements Is Most Correct

question 24

Multiple Choice

Which of the following statements is most correct?

• A) A portfolio with a beta of minus 2 has the same degree of risk to the holder, relative to the market, as a portfolio with a beta of plus 2.However the holder of either portfolio could lower his or her exposure by buying some "normal" shares.
• B) A share with a beta of -1.0 has zero systematic (or market) risk.
• C) It is possible for a share to have a positive beta even in situations where the correlation between the returns on it and those on another share are negative.
• D) Diversifiable risk, which is measured by beta, can be lowered by adding more shares to a portfolio.
• E) Statements a and c are both correct.

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