Which of the Following Statements Is CORRECT

question 45

Multiple Choice

Which of the following statements is CORRECT?

• A) Diversifiable risk can be reduced by forming a large portfolio, but normally even highly-diversified portfolios are subject to market (or systematic) risk.
• B) A large portfolio of randomly selected stocks will have a standard deviation of returns that is greater than the standard deviation of a 1-stock portfolio if that one stock has a beta less than 1.0.
• C) A large portfolio of stocks whose betas are greater than 1.0 will have less market risk than a single stock with a beta = 0.8.
• D) If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio.
• E) A large portfolio of randomly selected stocks will always have a standard deviation of returns that is less than the standard deviation of a portfolio with fewer stocks, regardless of how the stocks in the smaller portfolio are selected.

---

Definitions:

Self-mutilate

Self-mutilation involves deliberately harming one's own body without suicidal intent, often as a way to cope with emotional distress or psychological pain.

Body Cathexis

The emotional significance one attaches to their own body or specific body parts, affecting self-esteem and body satisfaction.

Negative Perceptions

Unfavorable views or judgements formed about something or someone based on subjective feelings or experiences.

Fattism

Discriminatory attitudes and behaviors directed towards individuals because of their size or weight, often rooted in stereotypes and biases.