Which one of the following statements related to risk is correct?
a. The beta of a portfolio must increase when a stock with a high standard deviationis added to the portfolio.
b. Every portfolio that contains 25 or more securities is free of unsystematic risk.
c. The systematic risk of a portfolio can be effectively lowered by adding T-bills tothe portfolio.
d. Adding five additional stocks to a diversified portfolio will lower the portfolio'sbeta.
e. Stocks that move in tandem with the overall market have zero betas.
Answers: 1
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Which one of the following statements related to risk is correct?
a. The beta of a portfolio must i...
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