Which of the Following Statements Is Most Correct

question 143

Multiple Choice

Which of the following statements is most correct?

• A)the variance of a portfolio is a weighted average of asset variances.
• B)the benefits of diversification are greatest when asset returns have zero correlations.
• C)the market portfolio truly eliminates all unsystematic risk.
• D)beta is the measure of an asset's unsystematic risk.

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Definitions:

Fixed Costs

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance premiums.

Full-Service Contract

An agreement that provides a complete range of services related to a specific product, property, or activity, including maintenance, repairs, and often replacements.

Profit

The financial gain achieved when the revenue from business activities exceeds the expenses, costs, and taxes involved in maintaining the operation.

Operating Loss

A financial metric representing the negative balance resulting from a company's operating expenses exceeding its revenues.