For a Diversified Portfolio Including a Large Number of Stocks,the

question 26

Multiple Choice

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

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

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Definitions:

Social Security

The U.S. social insurance program financed by a federal payroll tax that provides disability, retirement, and death benefits.

National Debt

The total amount of money that a country's government has borrowed, by various means, to finance its spending that exceeds tax revenues.

Deficit

An economic condition when a government's expenditures exceed its revenues, leading to borrowing or spending reserves.

National Debt

The sum of funds that a nation's government has acquired through different borrowing methods.