Which of the Following Statements Is CORRECTσ

question 66

Multiple Choice

Which of the following statements is CORRECTσ

• A) if an investor buys enough stocks, he or she can, through diversification, eliminate all of the diversifiable risk inherent in owning stocks. therefore, if a portfolio contained all publicly traded stocks, it would be essentially riskless.
• B) the required return on a firm's common stock is, in theory, determined solely by its market risk. if the market risk is known, and if that risk is expected to remain constant, then no other information is required to specify the firm's required return.
• C) portfolio diversification reduces the variability of returns (as measured by the standard deviation) of each individual stock held in a portfolio.
• D) a security's beta measures its non-diversifiable, or market, risk relative to that of an average stock.
• E) a stock's beta is less relevant as a measure of risk to an investor with a well-diversified portfolio than to an investor who holds only that one stock.

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Definitions:

Consequences

The result or effect of an action or condition, often considered in terms of its drawbacks or penalties.

Insomnia

A sleep disorder characterized by difficulty falling and/or staying asleep.

Nursing Diagnosis

A clinical judgment about individual, family, or community responses to actual or potential health problems/life processes which provide the basis for selecting nursing interventions.

Outcome Target

Outcome target refers to a specific, defined objective that an intervention, project, or treatment aims to achieve within a set timeframe.