For a Diversified Portfolio Including a Large Number of Stocks

question 36

Multiple Choice

For a diversified portfolio including a large number of stocks,:

• A) the weighted average expected return goes to zero.
• B) the weighted average of the betas goes to zero.
• C) the weighted average of the unsystematic risk goes to zero.
• D) the return of the portfolio goes to zero.
• E) the return on the portfolio equals the risk-free rate.

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Definitions:

Metabolic Wastes

Substances left over from metabolic processes, such as carbon dioxide, water, and nitrogenous compounds, that need to be excreted from the body.

Trigone

The triangle formed by the openings of the two ureters and the urethra in the internal floor of the bladder.

Tubular Reabsorption

The process by which the nephrons in the kidneys return substances from the filtrate to the blood, effectively conserving water, salts, and nutrients.