Diversification works only when assets are uncorrelated.   multiple choice 4 True False     e. Diversification reduces the portfolio beta.   multiple choice 5 True False     f. A portfolio of stocks, each with a beta of 1.0, will have a beta of less than 1.0 unless the returns are perfectly correlated.        multiple choice 6 True False

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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d. Diversification works only when assets are uncorrelated.

 

multiple choice 4

  • True
  • False

 

 

e. Diversification reduces the portfolio beta.

 

multiple choice 5

  • True
  • False

 

 

f. A portfolio of stocks, each with a beta of 1.0, will have a beta of less than 1.0 unless the returns are perfectly correlated.  

    

multiple choice 6

  • True
  • False

 

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