Which of the following is the most correct answer for the beta...
Which of the following is the most correct answer for the beta of a portfolio of 35 stocks where the lowest beta for an individual security is 0.84 and the highest is 1.51?
The beta of the portfolio must be 1.0 because of the large number of securities in the portfolio.
The beta of the portfolio must be less than 1.0 because of the large number of securities in the portfolio.
The beta of the portfolio will be between 0 and 1.51.
The beta of the portfolio will be between 0.84 and 1.51.
Homework Answers
Correct answer is option: The beta of the portfolio will be between 0.84 and 1.51.
ANSWER :
Option number 4 .
0.84 < beta of portfolio < 1.51
Hence, beta of portfolio will be between 084 and 1.51.
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QUESTION 18
Which of the following statements is CORRECT?
1.
An investor can eliminate virtually all diversifiable risk if
he or she holds a very large, well-diversified portfolio of
stocks.
2.
Once a portfolio has about 40 stocks, adding additional stocks
will not reduce its risk by even a small amount.
3.
It is impossible to have a situation where the market risk of
a single stock is less than that of a portfolio that includes the
stock.
4.
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please explain. if you are unsure about your answer
please do not answer question. Thank you.
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QUESTION 18
Which of the following statements is CORRECT?
1.
An investor can eliminate virtually all diversifiable risk if
he or she holds a very large, well-diversified portfolio of
stocks.
2.
Once a portfolio has about 40 stocks, adding additional stocks
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3.
It is impossible to have a situation where the market risk of
a single stock is less than that of a portfolio that includes the
stock.
4.
An...
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