Portfolio A has but one stock, while Portfolio B consists of all stocks that trade in the market, each held in proportion to its market value.Because of its diversification, Portfolio B will by definition be riskless.
Correct Answer:
Verified
Q6: If the returns of two firms are
Q7: A stock with a beta equal to
Q9: The slope of the SML is determined
Q22: A firm can change its beta through
Q25: If an investor buys enough stocks, he
Q27: We would generally find that the beta
Q28: Under the CAPM, the required rate of
Q29: A stock's beta is more relevant as
Q30: It is possible for a firm to
Q31: Bad managerial judgments or unforeseen negative events
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents