Diversification can effectively reduce risk. Once a portfolio is diversified the type of risk remaining is________ A. individual security risk B. riskless security risk C. risk related to the market portfolio D. total standard deviations E. None of these

According to the Capital Asset Pricing Model_______ A. the expected return on a security is negatively and non-linearly related to the security's beta. B. the expected return on a security is negatively and linearly related to the security's beta. C. the expected return on a security is positively and linearly related to the security's variance. D. the expected return on a security is positively and non-linearly related to the security's beta. E. the expected return on a security is positively and linearly related to the security's beta.

The elements along the diagonal of the variance/covariance matrix are____: A. covariances. B. security weights. C. security selections. D. variances. E. None of these. The majority of the benefits from portfolio diversification can generally be achieved with just _____ diverse securities. A.3 B. 6 C. 30 D. 50 E. 75

The systematic risk of the market is measured by:______ A. a beta of 1.0. B. a beta of 0.0. C. a standard deviation of 1.0 D. a standard deviation of 0.0 E. Variance of 1.0

The combination of the efficient set of portfolios with a riskless lending and borrowing rate results in_______ A. the capital market line which shows that all investors will only invest in the riskless asset. B. the capital market line which shows that all investors will invest in a combination of the riskless asset and the tangency portfolio. C. the security market line which shows that all investors will invest in the riskless asset only. D. the security market line which shows that all investors will invest in a combination of the riskless asset and the tangency portfolio. E. None of these

If a stock portfolio is well diversified, then the portfolio variance:_____ A. will equal the variance of the most volatile stock in the portfolio. B. may be less than the variance of the least risky stock in the portfolio. C. must be equal to or greater than the variance of the least risky stock in the portfolio. D. will be a weighted average of the variances of the individual securities in the portfolio. E. will be an arithmetic average of the variances of the individual securities in the portfolio.

One year ago, you purchased a stock at a price of $32.50. The stock pays quarterly dividends of $.40 per share. Today, the stock is worth $34.60 per share. What is the total amount of your dividend income to date from this investment?_______ A. $0.40 B. $1.60 C. $2.10 D $2.50 E $3.75