Business

Business, 13.07.2019 20:20, jeremy7131

Ue or false: increasing the number of stocks in a portfolio reduces market risk. a. true b. false

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Business, 19.07.2019 08:10, ramose7021

True or false: increasing the number of stocks in a portfolio reduces firm-specific risk.

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Business, 14.10.2019 17:30, 322251

True or false: increasing the number of stocks in a portfolio reduces firm-specific risk.truefalseconsider two stock portfolios. portfolio y consists of 20 different stocks from firms in different industries. portfolio x consists of 10 different stocks, also from firms in different industries. the return on portfolio y is likely to be volatile than that of portfolio x.suppose a stock analyst recommends buying stock in the following companies: and gasmobronoil and

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Business, 24.10.2019 17:43, eri85

5. portfolio risk and diversification a financial planner is examining the portfolios held by several of her clients. which of the following portfolios is likely to have the smallest standard deviation? a portfolio consisting of about 30 energy stocks. a portfolio consisting of about 30 randomly selected stocks. a portfolio containing only chevron stock. portfolio managers pick stocks for their clients’ portfolios based on the investment objective of the portfolio and several other factors. one key consideration is each stock’s contribution to portfolio risk and its statistical relationship with the portfolio’s other stocks. based on your understanding of portfolio risk, identify whether each statement is true or false. statement true false when returns on stock a increase, returns on stock b also increase. in general, this would mean that stocks a and b are positively correlated. the market risk component of the total portfolio risk can be reduced by randomly adding stocks to the portfolio. the risk in a portfolio will increase if more stocks that are negatively correlated with other stocks are added to the portfolio. a portfolio’s risk is not equal to the weighted average of the individual stocks’ standard deviations.

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Business, 29.10.2019 21:31, Maria3737

Which of the following statements is correct? a. if you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio. b. 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 10,000 traded stocks in the world, the least risky possible portfolio would include some shares of each one. c. if you formed a portfolio that consisted of all stocks with betas less than 1.0, 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. d. market risk can be eliminated by forming a large portfolio, and if some treasury bonds are held in the portfolio, the portfolio can be made to be completely riskless. e. a portfolio that consists of all stocks in the market would have a required return that is equal to the riskless rate

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