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All of your wealth has been invested in a well diversified portfolio consisting of many assets. You have read an article in the Wall Street

All of your wealth has been invested in a well diversified portfolio consisting of many assets. You have read an article in the Wall Street Journal that has convinced you to consider increasing your position in X Corp. stock. If you decide to buy this stock, its value would account for a very small percentage of your overall wealth.

When evaluating X Corp. stock's risk, you should consider...

a.

first its systematic risk (Beta) and then its total risk (Sigma)

b.

its unsystematic risk, measured using (1 - rho)xSigma, where rho is the correlation with the rate of return on the market portfolio.

c.

its total risk measured using Sigma (s.d. of return)

d.

its systematic risk measured using Beta

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