Question 23 (3.33 points) Which of the following is FALSE? The market risk is diversifiable. 9 with the ability to borrow and lend at the risk tree rate, there is one BEST efficient risky portfolio to hold the tangency portfolio (identified by the tangent point of the capital market line and the efficient frontier). 1 12 The efficient portfolios provide the highest expected return fora a given level risk (ise, the standard deviation. 15 The unsystematic risk is diversifiable. 18 20 21 23 24 Question 24 (3.33 points) Qualcomm currently has a capital structure of 65 percent debt and 35 percent equity, but is considering a new product that will be produced and marketed by a separate division. The new division will have a capital structure of 55 percent debt and 45 percent equity. Qualcomm has a current beta of 28, but is not sure what the beta for the new division will be. Nvidia is a firm that produces a product similar to the product under consideration by Qualcomm. Nvidia has a beta of 20, a capital structure of 45 percent debt and 55 percent equity and a marginal tax rate of 30 percent. Qualcorrum's tax rate is 35 percent. Estimate the levered beta for Qualcomm's new product division 28 27 29 30 2.81 2.28 05.02 3.59