Which of the Following Statements Is CORRECT

question 45

Multiple Choice

Which of the following statements is CORRECT?

• A) Diversifiable risk can be reduced by forming a large portfolio, but normally even highly-diversified portfolios are subject to market (or systematic) risk.
• B) A large portfolio of randomly selected stocks will have a standard deviation of returns that is greater than the standard deviation of a 1-stock portfolio if that one stock has a beta less than 1.0.
• C) A large portfolio of stocks whose betas are greater than 1.0 will have less market risk than a single stock with a beta = 0.8.
• D) If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio.
• E) A large portfolio of randomly selected stocks will always have a standard deviation of returns that is less than the standard deviation of a portfolio with fewer stocks, regardless of how the stocks in the smaller portfolio are selected.

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Definitions:

Electrolytes

Minerals in the body that have an electric charge, crucial for hydrating the body, regulating nerve and muscle function, balancing blood acidity and pressure.

Ions

Atoms or molecules with a net electric charge due to the loss or gain of one or more electrons.

Solution

A homogeneous mixture composed of two or more substances, where the solute is dissolved in the solvent.

Adrenal Cortex

The outer layer of the adrenal glands that produces steroid hormones such as cortisol and aldosterone, which regulate metabolism and blood pressure.