Which One of the Following Statements Is Correct

question 92

Multiple Choice

Which one of the following statements is correct?

• A)A portfolio that contains at least 30 diverse individual securities will have a beta of 1.0.
• B)Any portfolio that is correctly valued will have a beta of 1.0.
• C)A portfolio that has a beta of 1.12 will lie to the left of the market portfolio on a security market line graph.
• D)A risk-free security plots at the origin on a security market line graph.
• E)An underpriced security will plot above the security market line.

---

Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all goods and services produced within a country in real terms.

Taxation

The process by which governments charge fees on individual or corporate income, activities, or products to fund government activities.

Expenditures

The total amount spent on goods and services, including both personal consumption and investment by businesses.

Income

Income is the money received, especially on a regular basis, for work or through investments.