If Investors Are Risk Averse and Hold Only One Stock,we

question 145

True/False

If investors are risk averse and hold only one stock,we can conclude that the required rate of return on a stock whose standard deviation is 0.21 will be greater than the required return on a stock whose standard deviation is 0.10.However,if stocks are held in portfolios,it is possible that the required return could be higher on the stock with the lower standard deviation.

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Definitions:

Distances

The amount of space between two points, which can be measured in various units such as kilometers, miles, meters, or feet, important for logistics and planning.

Minimum Cost

The lowest possible expense incurred in the production or acquisition of goods or services without compromising quality.

Shipping Solution

A system or service that simplifies the process of sending goods from one place to another.

Objective Function

A mathematical expression that defines the goal of an optimization problem, often involving the maximization or minimization of some quantity.