FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

23. Which of the following statements is CORRECT? a. A stock with an above-average standard deviation must also have an above-average beta. b. A two-stock

23.

Which of the following statements is CORRECT?

a. A stock with an above-average standard deviation must also have an above-average beta.
b. A two-stock portfolio will always have a lower standard deviation than a one-stock portfolio.
c. A two-stock portfolio will always have a lower beta than a one-stock portfolio.
d. 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.
e. If portfolios are formed by randomly selecting stocks, a 10-stock portfolio will always have a lower beta than a one-stock portfolio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sustainable Finance And Banking

Sustainable Finance And Banking

Authors: Marcel Jeucken

1st Edition

1853837660, 978-1853837661

More Books

Students also viewed these Finance questions

Question

★★★★★
A smooth ceramic sphere (SG = 2.6) is immersed in a flow of water at 20C and 25 cm/s. What is the sphere diameter if it is encountering (a) creeping motion, Red = 1; or (b) transition to turbulence,...

Answered: 1 week ago

Question

★★★★★
Consulting team, part 2. You are assigned to be part of a team of three analysts of a global management consulting company as described in Exercise

Answered: 1 week ago

Question

★★★★★
1. What is statistical inference?

Answered: 1 week ago

Question

★★★★★
An elevator rail is assumed to meet specifications if its diameter is between 0.98 and 1.01 inches. Each year a company produces 100,000 elevator rails. For a cost of $10/2 per year the company can...

Answered: 1 week ago

Question

★★★★★
You are planning to retire in 10 years (i.e., the end of the 10th year from now). You currently (t=0) have $470,000 in a stock account. If the stock account earns a return of 9.25 percent per year...

Answered: 1 week ago

Question

★★★★★
PROBLEM 8-29 Completing a Master Budget LOB-2, L08-4, LOB-7, L08-.8, L08-9. L08-10 The following data relate to the operations of Shilow Company. a wholesale distributor of consumer goods: Current...

Answered: 1 week ago

Question

★★★★★
Mr. Cruz has been working on a research related to job satisfaction of different employees from different departments. Since the company has hundreds of employees in total the number of employees per...

Answered: 1 week ago

Question

★★★★★
a. Suppose, as a result of various dynamic factors associated with exposure to international competition, Albania's economy grew, and is now represented by the rightmost production possibility...

Answered: 1 week ago

Question

★★★★★
Exhibit 6-10 Midwest Office Products: Five Orders ORDER Price Acquisition cost 1 2 3 4 5 $610 $634 $6,100 Number of cartons in order $6,340 $6,100 500 500 5,000 5,000 5,000 Manual order Number of...

Answered: 1 week ago

Question

★★★★★
Use the moment Distribution Method to determine the bending moments at supports A, B and C for the continuous beam loaded as shown below. The beam has a constant cross- section. w=2k/ft 178 A 8' P=6K...

Answered: 1 week ago

Question

★★★★★
The average student loan debt is reported to be $25,235. A student belives that the student loan debt is higher in her area. She takes a random sample of 100 college students in her area and...

Answered: 1 week ago

Question

★★★★★
to promote and effect the cohesion of the organization: the corporate glue.

Answered: 1 week ago

Question

★★★★★
to facilitate a cultural and functional interchange in order to encourage managers to take a fresh look at problems and issues;

Answered: 1 week ago

Question

★★★★★
to gain top management involvement by ensuring that managers know the global resources of the organization;

Answered: 1 week ago

Previous Question Next Question