Which of the Following Statements Is CORRECT

question 112

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.
• E) If the returns on two stocks are perfectly positively correlated and these stocks have identical standard deviations, an equally weighted portfolio of the two stocks will have a standard deviation that is less than that of the individual stocks.

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Definitions:

Extreme Wealth

Refers to the possession of financial assets and resources that vastly exceed those of the average individual, often to the point of allowing significant influence over economic and political processes.

Social Problem

Issues within a society that are viewed as undesirable, harmful, or needing address, such as poverty or discrimination.

Extreme Poverty

A condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education, and information, typically measured by international standards.

Out Of Poverty

A term referring to the transition or process by which individuals or groups move from a state of poverty to a more economically stable or prosperous condition.