VENI of the two individual portfolios, 10.0% Hocky also has a 550.000 portfolio, but it has set of spectrum of the 19. Bob has a 550.000 stock portfolio wisho 121 VALLO also 25%. The correlation coefficient, T. between Bo's decky's portfolio combine their portfolios, which of the following best describes the combined $100.00 pont 4. The combined portfolio's expected return will be less than the simple we went the end b. The combined portfolio's beta will be equal to a simple weighted average of the beas of the wondwa portfolios, 1.0; its expected return will be equal to a simple weighted average of the expected to the two individual portfolios, 10.0%; and its standard deviation will be less than the simple ever of the c. The combined portfolio's expected return will be greater than the simple weighted werage of the expected returns of the two individual portfolios, 10.0% portfolios' standard deviations, 25%. d. The combined portfolio's standard deviation will be greater than the simple average of the two portfolion standard deviations, 25%. The combined portfolio's standard deviation will be equal to a simple average of the two portfolios stum % FINS of the two individual portfolios, 10.0% VALL Becky also has $50.000 portfolio, but has been 19. Bob has a 550.000 och portfolio 13 combine their portfolios, which of the following bo describe S10.000 No 25%. The correlation coeficient. T. between Bond Decky porno The combined portfolio's expected return will be less than the simple wed b. The combined portfolio's bets will be caual simple was with the wall portfolios, 1.0; its expected return will be sualto simple we were of vespected of the two individual portfolios, 10.0% and its standard deviation will be less than the simple verowo c. The combined portfolio's expected return will be greater than the simple weighted aver of the expected returns of the two individual portfolios, 10.0%. d. The combined portfolio's standard deviation will be greater than the simple average of the two portfolio standard deviations, 25%. portfolios standard deviations, 25%. e. The combined portfolio's standard deviation will be equal to a simple average of the two portfolionistas deviations, 25%. 9. Which of the following staternents best describes what you should expect if you randomly select stock your portfolio? @Adding more such stocks will reduce the portfolio's unsystematic, or diversifiable, risk. b. Adding more such stocks will increase the portfolio's expected rate of return. c. Adding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk d. Adding more such stocks will have no effect on the portfolio's risk. e. Adding more such stocks will reduce the portfolio's market risk but not its unsystematic risk Which of the following statements is CORRECT? . If a company with a high beta merges with a low-beta company, the best estimate of the company's beta is 1.0. Logically, it is easier to estimate the betas associated with capital budgeting projects th with stocks, especially if the projects are closely associated with research and develo The beta of an "average stock," which is also "the market beta," can change over tir fa newly issued stock does not have a past history that can be used for calculatin lways estimate that its beta will turn out to be 1.0. This is especially true if the c ebt than the average firm. uring a period when a company is undergoing a change such as increasing its kier projects, the calculated historical beta may be drastically different from Eure Send a chat mir eyents that are beste
