The ____ the number of stocks in a portfolio and the ____ the time period, the ____ the portfolio beta.
A) larger, longer, less stable
B) larger, longer, more stable
C) larger, shorter, less stable
D) larger, shorter, more stable
E) smaller, longer, more stable

Question

Quizplus · Accepted Answer

The larger the number of stocks in a portfolio, the more diversified it is, which tends to make the portfolio's beta more stable over time. Similarly, a longer time period allows for more averaging of returns, which also contributes to stability.

The ____ the Number of Stocks in a Portfolio and the ____

The the Number of Stocks in a Portfolio and the