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.© BrainMass Inc. brainmass.com February 24, 2021, 2:33 pm ad1c9bdddf
Answer: e. All of the statements above are correct.
a is correct. Beta of a Stock can be less than the beta of ...
Answer to a multiple choice question on risk of holding securities.