Question
**PLEASE SHOW WORK Portfolio A is a well-diversified portfolio that is equally- weighted among 12,000 different and diverse stocks. Portfolio A has an average amount
**PLEASE SHOW WORK
Portfolio A is a well-diversified portfolio that is equally- weighted among 12,000 different and diverse stocks. Portfolio A has an average amount of systemic risk, so it has exactly the same amount of systemic risk as the market portfolio. Portfolio B consists of 2 stocks that operate in the active leisure industry: 3000 shares of Treeptop Entertainment stock, which has a price of $14.00 per share and a beta of 0.68; and 2,000 shares of Garfield Recreational stock, which has a price of $6.00 per share and a beta of 1.86. All the stocks have some unsystematic risk and all stocks have the same level of unsystematic risk. Which of the following assertions is most likely to be true?
A. Portfolio A has more systemic risk than portfolio B, and portfolio B has more unsystematic risk than portfolio A
B. Portfolio A has more systemic risk than portfolio B, and portfolio A more unsystematic risk than portfolio B
C. Portfolio B has more systemic risk than portfolio A, and portfolio B has more unsystematic risk than portfolio a
D. Portfolio B has more systemic risk than portfolio A and portfolio A has more unsystematic risk than portfolio a
E. None of the above
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