Which one of the following statements is true?
A)Risk and return are inversely related.
B)Investors are compensated only for diversifiable risk.
C)The beta of a portfolio may be lower than the lowest beta of any individual security held within the portfolio.
D)How a security affects the risk of a portfolio is less important than the actual risk of the security itself.
E)Investing has two dimensions: risk and return.

Question

Quizplus · Accepted Answer

This statement is true. Investing is commonly understood to involve taking risks in order to generate returns, so these two factors are usually considered the main components of investment decision making.

Which One of the Following Statements Is True