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Author Question: Which of the following statements is correct? (Read 86 times)

mmmmm

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on: Aug 7, 2023
Which of the following statements is correct?

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Even if you add enough randomly selected stocks to a portfolio, you can never eliminate all of the company-specific risk from the portfolio.


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If you were restricted to investing in publicly traded common stocks, yet you wanted to minimize the riskiness of your portfolio as measured by its beta, then according to the CAPM theory you should invest an equal amount of money in each stock in the market. That is, if there were 100,000 traded stocks in the world, the least risky possible portfolio would include some shares of each one.


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If you formed a portfolio that consisted of all stocks with betas less than 0.9, which is about half of all stocks, the portfolio would itself have a beta coefficient that is equal to the weighted average beta of the stocks in the portfolio, and that portfolio would have less risk than a portfolio that consisted of all stocks in the market.


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A portfolio that consists of all stocks in the market would have a required return that is less than the risk-free rate.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by mmmmm on Aug 7, 2023

brunoanthony

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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mmmmm

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

rachel

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Reply 3 on: Yesterday
Wow, this really help

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