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Which of the following statement is correct? O Business risk type of risk is magnified by the degree to which the firm relies on fixed

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Which of the following statement is correct? O Business risk type of risk is magnified by the degree to which the firm relies on fixed operating expenses in producing sales. O For the benefits of diversification to occur the correlation coefficient between two assets must be greater than +1.00. O All the answers are incorrect. O The closer the correlation coefficient is to +1.0, the more the two variables will tend to move in the opposite direction with each other at the same time. O Diversifiable risk is measured by a term called beta (?). Which of the following statement is correct? O The diversification effect results in risk reduction because we are combining two assets that have returns that are negatively correlated (r= -1.0). O The risk-free rate expressed as (km - RFR), indicates the premium investors require over the market rate to invest in the bond index. O The beta measures the standard deviation's percentage of the expected value. O Risk aversion is the tendency to try to take on risky situations even though adequate compensation is never offered. O All the answers are incorrect. Which of the following statement is correct? O The risk/return tradeoff states that financial decisions that subject stockholders to less risk must offer a higher expected return. O The coefficient of variation (CV) measures relative risk by relating the standard deviation to the beta. O Whenever we want to compare the risk of investments that have different means, we use the standard deviation. O All the answers are incorrect., A O High beta stocks move more than the market and low beta stocks move less than the market, both in the same direction as the market

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