Which of the Following Statements Is Correct

question 63

Multiple Choice

Which of the following statements is correct?

• A)A two-stock portfolio will always have a lower standard deviation than a one-stock portfolio.
• B)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.
• C)A two-stock portfolio will always have a lower beta than a one-stock portfolio.
• D)If portfolios are formed by randomly selecting stocks, a 10-stock portfolio will always have a lower beta than a one-stock portfolio.

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Definitions:

Partial Reinforcement

A conditioning schedule in which a reward or punishment (reinforcement) is not administered every time the desired response is performed, leading to more resilient behavior.

Consistent Punishment

A disciplinary approach where the consequences for undesirable behaviors are applied reliably and predictably.

Minimum Level

The lowest or smallest amount of something that is required, acceptable, or achievable.

Immediate Follow

This term may refer to the next event or action that occurs right after another in a sequence, but its specific context is necessary for a precise definition.