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pls answer all 8. The purpose of diversification is to do which of the following? A. Increase the expected risk premium B. Reduce the beta

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8. The purpose of diversification is to do which of the following? A. Increase the expected risk premium B. Reduce the beta of the portfolio to zero C. Reduce the portfolio's systematic risk level D. Reduce the portfolio's unsystematic risks Refer to the table below to answer the following 3 questions: 9. The Capital Asset Pricing Model states that the expected return on a security depends on which of the following? (Choose more than one.) I pure time value of money as measured by the risk-free rate II. amount of systematic risk as measured by beta III. the reward for systematic risk as measured by the market risk premium IV. amount of risk as measured by the standard deviation Stock Standard Beta Deviation 0.25 0.8 0.15 1.1 11. Which stock has the greatest systematic risk? A. A because it has the higher standard deviation B. B because it has the higher beta 12. Which stock has the greatest total risk? A. A because it has the higher standard deviation B. B because it has the higher beta 10. By combining assets into a portfolio 13. According to the CAPM, Which stock should have A. you can reduce total risk by eliminating the greatest expected return? systematic risk. A. A because it has the higher standard deviation B. you can increase return by reducing unsystematic B. B because it has the higher beta risk. C. you can reduce total risk by reducing unsystematic risk. D. you can eliminate systematic risk. 14. Of the following 4 portfolios, choose the one that is most diversified. D C Amazon Netflix Best Buy Disney Netflix Toyota Home Depot Pfizer (pharmaceuticals) Netflix Apple Sony Pfizer (pharmaceuticals) Netflix Amazon Pfizer (pharmaceuticals) Disney

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