Which of the Following Statements Is Most Correct

question 56

Multiple Choice

Which of the following statements is most correct?

• A) A portfolio with a beta of minus 2 has the same degree of risk to its holder,relative to the market,as a portfolio with a beta of plus 2.However,the holder of either portfolio could lower his or her risk exposure by buying some "normal" stocks.
• B) A stock with a beta of −1.0 has zero systematic (or market)risk.
• C) It is possible for a stock to have a positive beta even in situations where the correlation between the returns on it and those on another stock are negative.
• D) Diversifiable risk,which is measured by beta,can be lowered by adding more stocks to a portfolio.
• E) Statements a and c are both correct.

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Definitions:

Downward Social Comparison

The act of comparing oneself to others who are worse off in order to feel better about one's own situation.

Self-Regulatory Perseveration

A psychological principle referring to the continuous effort to control one's thoughts, emotions, and behaviors, even in the face of challenges or setbacks.

Self-Awareness

The state of being cognizant of one’s own personality, sensations, motivations, and yearnings.

Depression

A common and serious medical illness that negatively affects how you feel, the way you think, and how you act, characterized by persistent feelings of sadness and loss of interest.