Which One of the Following Portfolios Might Be Expected to Exhibit

question 9

Multiple Choice

Which one of the following portfolios might be expected to exhibit less specific risk?

• A) Five random stocks; portfolio beta = 0.8
• B) Three random stocks; portfolio beta = 1.2
• C) Ten random stocks; portfolio beta = 1.0
• D) Twelve random stocks; portfolio beta unknown

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Definitions:

Twenties

A term often used to describe the decade between 20 and 29 years of age, or the 1920s era known for its unique cultural and social dynamism.

Justification of Effort

The tendency to attribute a greater value to an outcome they had to put effort into achieving.

Liking

A feeling of affection or fondness towards someone or something.

Suffered

Experienced or been subjected to something bad or unpleasant.