What Should You Expect to Happen If You Randomly Select

question 101

Multiple Choice

What should you expect to happen if you randomly select stocks and add them to your portfolio?

• A)This will reduce the portfolio's unsystematic, or diversifiable, risk.
• B)This will increase the portfolio's expected rate of return.
• C)This will reduce the portfolio's beta coefficient and thus its systematic risk.
• D)This will have no effect on the portfolio's risk.

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