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6. I ou randomly select stocks and add them to your portfolio, which of the...

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Accounting

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6. I ou randomly select stocks and add them to your portfolio, which of the following statements best describes what you should expect? @ Adding more such stocks will increase the portfolio's expected rate of return. b. Adding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk. Adding more such stocks will have no effect on the portfolio's risk d. Adding more such stocks will reduce the portfolio's market risk but not its unsystematic risk. e. Adding more such stocks will reduce the portfolio's unsystematic, or diversifiable risk. You are holding a stock that has a beta of 1.5 and is currently in equilibrium. The required return on the stock is 19.0% and the return on a risk-free asset is 4%. What would be the return on the stock if the stock's beta increased to 2.0 while the risk-free rate and market risk premium remained unchanged? a. 17% b. 19% c. 21% d. 24% 27%

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