For a Diversified Portfolio Including a Large Number of Stocks

question 43

Multiple Choice

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

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

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