Which of the Following Statements Is Correct

question 45

Multiple Choice

Which of the following statements is correct?

• A) If the returns from two stocks are perfectly positively correlated and the two stocks have equal variance,an equally weighted portfolio of the two stocks will have a variance which is less than that of the individual stocks.
• B) If a stock has a negative beta,its expected return must be negative.
• C) According to the CAPM,stocks with higher standard deviations of returns will have higher expected returns.
• D) A portfolio with a large number of randomly selected stocks will have less market risk than a single stock which has a beta equal to 0.5.
• E) None of the above statements is correct.

Understand the strategic application of reinforcement and punishment to shape desired behaviors in organizational settings.

Understand the concept of achievement motivation and its impact on personal success.

Recognize the biases and illusions present in interview processes and personnel assessments.

Appreciate the role of self-discipline and grit in academic and professional performance.

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Definitions:

Goodwill

An intangible asset representing the excess of acquisition cost over the fair value of identifiable net assets acquired in a business combination.

Acquiring Company

A company that purchases most or all of another company's shares to gain control of that company.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its tangible and identifiable intangible assets.

Book Values

The value of an asset as it appears on a company's balance sheet, calculated as the cost of the asset minus any depreciation or amortization.