Which of the Following Is Most Likely to Be True

question 137

Multiple Choice

Which of the following is most likely to be true for a portfolio of 40 randomly selected stocksσ

• A) the riskiness of the portfolio is the same as the riskiness of each stock if it was held in isolation.
• B) the beta of the portfolio is less than the average of the betas of the individual stocks.
• C) the beta of the portfolio is equal to the average of the betas of the individual stocks.
• D) the beta of the portfolio is larger than the average of the betas of the individual stocks.
• E) the riskiness of the portfolio is greater than the riskiness of each of the stocks if each was held in isolation.

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Definitions:

Exploration Licenses

Exploration licenses grant the right to explore for natural resources, such as oil, natural gas, or minerals, in a designated area.

Stripping Activity Asset

An asset resulting from the removal of overburden or waste materials in mining operations, where the activity provides better access to mineral ore.

Surface Mine Stripping Costs

Expenses incurred in the process of removing overburden or waste material to access a mineral resource in surface mining operations.

Production Phase

The stage in a project or company's lifecycle focused on actual manufacturing or creation of products or services.