The benefit in risk reduction from adding securities Blank______ as more and more securities are added to a portfolio. Multiple choice question. increases declines remains the same
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The benefit in risk reduction from adding securities Blank______ as more and more securities are added to a portfolio.
increases
declines
remains the same
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- Which of the following risks are reduced as more securities are added to the underlying portfolio? More than one answer may be correct. Multiple select question. Asset-specific risk Systematic risk Unique risk Market risk Unsystematic riskAs additional securities are added to a portfolio, total risk will generally ________ at a _________ rate. Group of answer choices rise; decreasing rise; increasing fall; decreasing fall; increasingIn portfolio management, risk reduction is achieved by investing in a portfolio in which the securities Question 3 options:1) have a high covariance 2) have a high correlation coefficient 3) have a low coefficient of variation 4) have a lowcovariance 5) are perfectly positively correlated.
- can be progressively eliminated by adding stocks to a portfolio? Systematic risk Specific risk Market risk Inflation rate riskThe security market line describes the expected return for O The efficient portfolio O The inefficient portfolio O All portfolios and assets O The efficient and inefficient portfoliosQ. Markowitz theory indicates to create and construct a portfolio of assets to maximize returns within a given level of risk , or to devise one with a desired,specified and expected level of return with the least amount of risk.Under this broader concept,answer the following: a) Justify , why an optimal portfolio should lie on security market line curv? b) Being an efficient market investor , justify how an efficient frontier curve can be helpful for you in portfolio selection process ?
- Which type of risk does not change when securities are added to a portfolio? Multiple choice question. Unique risk Company-specific risk Systematic risk Unsystematic riskEconomy Probability Stock A Stock B Recession -30% -20% 10% 5% 40% 15% Average Boom What is the standard deviation of Stock A? 18.8% 24.9% 12.9% 0.25 0.50 0.25 20.0%Explain the unique risk and the market risk. What risk can be reduced when you diversify your portfolio by investing across many different assets?
