Which of the following statements is correct? Check all that apply. Non-systematic risk reflects the risk that remains after an investor has diversified his or her portfolio. Possible sources of market or non-diversifiable risk include inflation and commodity price changes, changes in currency exchange rate and fluctuations in interest rates. A investor's exposure to market risk can be diversified away by holding approximately 40 randomly-selected securities in an investor's portfolio. he phenomena and behaviors discussed above are based on the assumption that the majority of investors are risk averse. According to the cept of risk aversion, Check all that apply. An investor will assess the rate of return offered by a security, and then determine the corresponding riskiness of the security. An investor will assess the riskiness of a security, and then determine his or her appropriate rate of return.
Which of the following statements is correct? Check all that apply. Non-systematic risk reflects the risk that remains after an investor has diversified his or her portfolio. Possible sources of market or non-diversifiable risk include inflation and commodity price changes, changes in currency exchange rate and fluctuations in interest rates. A investor's exposure to market risk can be diversified away by holding approximately 40 randomly-selected securities in an investor's portfolio. he phenomena and behaviors discussed above are based on the assumption that the majority of investors are risk averse. According to the cept of risk aversion, Check all that apply. An investor will assess the rate of return offered by a security, and then determine the corresponding riskiness of the security. An investor will assess the riskiness of a security, and then determine his or her appropriate rate of return.
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the following statements is correct? Check all that apply.
Non-systematic risk reflects the risk that remains after an investor has diversified his or her portfolio.
Possible sources of market or non-diversifiable risk include inflation and commodity price changes, changes in currency exchange rates,
and fluctuations in interest rates.
A investor's exposure to market risk can be diversified away by holding approximately 40 randomly-selected securities in an investor's
portfolio.
The phenomena and behaviors discussed above are based on the assumption that the majority of investors are risk averse. According to the
ncept of risk aversion, Check all that apply.
An investor will assess the rate of return offered by a security, and then determine the corresponding riskiness of the security.
An investor will assess the riskiness of a security, and then determine his or her appropriate rate of return.
Which statement is correct?
O It is theoretically possible to create a portfolio that offers a positive return and whose standard deviation is zero.
It is theoretically impossible to create a portfolio that offers a positive return and a standard deviation of zero.
The addition of an asset to a portfolio, when the correlation coefficient between the asset's and portfolio's returns is -1, will increase the
riskiness of the portfolio.
The addition of an asset to a portfolio, when the correlation coefficient between the asset's and portfolio's returns is +1, will reduce the
riskiness of the portfolio.
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