a. A portfolio of stocks, each with a beta of 1.0, will have a beta...
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Accounting
a. A portfolio of stocks, each with a beta of 1.0, will have a beta of less than 1.0 unless the returns are perfectly correlated.
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True
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False
b. A stock with a low standard deviation always contributes less to portfolio risk than a stock with a higher standard deviation.
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True
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False
c. The contribution of a stock to the risk of a well-diversified portfolio depends on its market risk.
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True
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False
d. A well-diversified portfolio with a beta of 2.0 is twice as risky as the market portfolio.
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True
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False
e. An undiversified portfolio with a beta of 2.0 is less than twice as risky as the market portfolio.
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True
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False
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