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Consider Three Stocks (A, B, and C) with Three Different

Question 42

Multiple Choice

Consider three stocks (A, B, and C) with three different beta coefficients. Beta A is 0.9, beta B is 0.7, and beta C is -0.5. If an investor holds shares of A and wishes to diversify their portfolio and limit the risk from a decline in the overall stock market, they should add to their portfolio


A) More shares of A
B) Shares of B
C) Shares of C
D) None of the above as the position is already diversified

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