Which of the Following Statements Is CORRECT

question 58

Multiple Choice

Which of the following statements is CORRECT?

• A) A portfolio that consists of 40 stocks that are not highly correlated with "the market" will probably be less risky than a portfolio of 40 stocks that are highly correlated with the market, assuming the stocks all have the same standard deviations.
• B) A two-stock portfolio will always have a lower beta than a one-stock portfolio.
• C) If portfolios are formed by randomly selecting stocks, a 10-stock portfolio will always have a lower beta than a one-stock portfolio.
• D) A stock with an above-average standard deviation must also have an above-average beta.
• E) A two-stock portfolio will always have a lower standard deviation than a one-stock portfolio.

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Definitions:

Unpaid Time Off

Time away from work, such as for personal reasons, health, or vacation, during which an employee does not receive salary or wages.

Serious Illness

A health condition that poses a significant risk to an individual's well-being, often requiring extensive medical care.

Civil Rights Act of 1991

A landmark United States labor law that strengthened the rights of employees regarding workplace discrimination, making it easier to bring discrimination lawsuits and obtain jury trials and damages.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that can affect an individual's employment, interfere with an individual's work performance, or create a hostile or offensive work environment.