Which of the Following Statements Is Correct

question 148

Multiple Choice

Which of the following statements is correct?

• A)A portfolio with a large number of randomly selected stocks would have more market risk than a single stock that has a beta of 0.5, assuming that the stock's beta was correctly calculated and is stable.
• B)If a stock has a negative beta, its expected return must be negative.
• C)A portfolio with a large number of randomly selected stocks would have less market risk than a single stock that has a beta of 0.5.
• D)According to the CAPM, stocks with higher standard deviations of returns must also have higher expected returns.

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Definitions:

Small Government

A political philosophy that advocates for minimal government intervention in the economic and personal affairs of citizens, emphasizing lower taxes and reduced government spending.

Congestion Zones

Areas in a city or region where access is regulated or priced to reduce traffic congestion, typically involving fees for entry or use during peak times.

Traffic Congestion

The condition on transport networks that occurs as use increases and is characterized by slower speeds and longer trip times.

Privatize National Defense

The concept of transferring national defense responsibilities from the government to private entities.