Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. which of the following statements is correct? a st

Which of the following statements is CORRECT? A stock's beta is less relevant as a...

70.2K

Verified Solution

Question

Finance

image
Which of the following statements is CORRECT? A stock's beta is less relevant as a measure of risk to an investor with a welldiversified portfolio than to an investor who holds only that one stock. If an investor buys enough stocks, he or she can, through diversification, eliminate all of the diversifiable risk inherent in owning stocks. Therefore, if a portfolio contained all publicly traded stocks, it would be essentially riskless. Portfolio diversification reduces the variability of returns (as measured by the standard deviation) of each individual stock he? in a portfolio. A security's beta measures its non-diversifiable, or market, risk relative to that of an average stock

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

I was stunned at how the lake had changed in the 10 years since I had...

Biology
Q

      Please read the attached Siemens case study, entitled “Training & Development as a Strategy for Growth” and...

General Management
Q

5 of radius r around the earth of mass M has ing in a circular...

Physics
Q

1 Two metallic concentric shells are shown Before closing the switch charge on inner shell...

Physics
Q

The volume V (in cubic feet) of a right cylinder with a height of 6...

Geometry
Q

Find the mean of the binomial distribution for which n 50 and p 0 2...

Statistics
Q

Choose the correct answer O 19 mg 19 g O 19 kg

Calculus
Q

Let u 2 3 4 v 3 a 6 w 0 4 3 a 3...

Algebra
Q

A biologist has a 9317 gram sample of a radioactive substance Find the mass of...

Algebra
Q

From the creditor's perspective, what is the purpose of loan covenants? A. To assist government...

Accounting
Q

Braverman Company has two manufacturing departments-Finishing and Fabrication. The predetermined overhead rates in Finishing and...

Accounting
Q

Please explain and show all work. Thank you!

Accounting