Which of the Following Statements Is CORRECT

question 48

Multiple Choice

Which of the following statements is CORRECT?

• A) A portfolio with a large number of randomly selected stocks would have more market risk than a single stock that has a beta of 0.5, assuming that the stock's beta was correctly calculated and is stable.
• B) If a stock has a negative beta, its expected return must be negative.
• C) A portfolio with a large number of randomly selected stocks would have less market risk than a single stock that has a beta of 0.5.
• D) According to the CAPM, stocks with higher standard deviations of returns must also have higher expected returns.
• E) If the returns on two stocks are perfectly positively correlated (i.e., the correlation coefficient is +1.0)and these stocks have identical standard deviations, an equally weighted portfolio of the two stocks will have a standard deviation that is less than that of the individual stocks.

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Definitions:

Societal Cultures

The shared norms, values, traditions, and behaviors of a group of people that define their way of life.

GLOBE Project

The GLOBE Project is a comprehensive research initiative that examines the interrelations between societal culture, organizational culture, and organizational leadership across various nations and cultures.

Team-Oriented

A focus or preference for working collaboratively with others in a group setting toward common goals or objectives.

Participative Dimensions

Aspects of organizational culture or leadership that involve employees in decision-making processes and consider their input in organizational or managerial decisions.