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:

Wagner Act

Also known as the National Labor Relations Act of 1935, it is a foundational statute of US labor law which guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Taft-Hartley Act

A 1947 federal law that restricted the activities and power of labor unions in the United States.

Landrum-Griffin Act

A 1959 U.S. federal law formally known as the Labor-Management Reporting and Disclosure Act, which aims to protect union members' rights and promote democracy within labor organizations.

Pure Monopsonist

A market condition where there is only one buyer for a product or service, giving this buyer significant control over the market.