Which of the Following Statements Is Correct

question 33

Multiple Choice

Which of the following statements is correct?

• A) If the returns from two stocks are perfectly positively correlated and the two stocks have equal variance, an equally weighted portfolio of the two stocks will have a variance whish is less than that of the individual stocks.
• B) If a stock has a negative beta, its expected return must be negative.
• C) According to the CAPM, stocks with higher standard deviations of returns will have higher expected returns.
• D) A portfolio with a large number of randomly selected stocks will have less market risk than a single stock with has a beta equal to 0.5.
• E) None of the above statements are correct.

---

Definitions:

John Brown

An American abolitionist who believed in and advocated armed insurrection as the only way to overthrow the institution of slavery in the United States.

William Lloyd Garrison

A prominent American abolitionist, journalist, and social reformer in the 19th century, best known for his tireless efforts to end slavery in the United States.

Violent Action

Behavior involving physical force intended to hurt, damage, or kill someone or something.

Democratic Party Split

Refers to divisions within the Democratic Party, often caused by ideological differences, policy disputes, or clashes between personalities, impacting party unity and electoral strategies.