Which of the Following Statements Is Most Correct

question 56

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 its 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 risk exposure by buying some "normal" stocks.
• B) A stock with a beta of −1.0 has zero systematic (or market)risk.
• C) It is possible for a stock to have a positive beta even in situations where the correlation between the returns on it and those on another stock are negative.
• D) Diversifiable risk,which is measured by beta,can be lowered by adding more stocks to a portfolio.
• E) Statements a and c are both correct.

---

Definitions:

Packet Sniffer

A tool or software used to monitor and capture data packets as they traverse a network.

Firewall

A network security system that monitors and controls incoming and outgoing network traffic based on predetermined security rules.

Zombie

In computing, a computer connected to the internet that has been compromised by a hacker, virus, or trojan and can be used to perform malicious tasks under remote direction.

Hackers

Individuals skilled in manipulating or entering computer systems, often with the intent to find vulnerabilities or engage in unauthorized activities.