1. Business
2. Finance
3. Valuing Securities using Accounting Information
4. 28870

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Which of the following statements is most correct?

a.It is possible to have a situation where the market risk of a single stock is less than the market risk of a portfolio of stocks.

b.The market risk premium will increase if, on average, market participants become more risk averse.

c.If you selected a group of stocks whose return is perfectly positively correlated, then you could end up with a portfolio for which none of the unsymmetric risk is diversified away.

d.Statements a and b are correct.

e.All of the statements above are correct.