1)Which of the statement is WRONG? A.The total risk of a security contains risk which is not rewarded. B.Diversification eliminates both idiosyncratic risk and systematic risk. C.There is no clear relationship between the volatility and return of individual stocks. D.The market portfolio contains all shares of all stocks and securities in the market. | 2)Which statement below is an appropriate characterization of the asset beta? A. The asset beta is an estimate of the systematic risk a stock would have once leverage is added into the analysis. B.The asset beta is larger than the equity beta for small stocks. C.The asset beta is readily observable for comparable firms. D. The asset beta is an estimate of the systematic risk a stock would have in the absence of leverage
1)Which of the statement is WRONG? A.The total risk of a security contains risk which is not rewarded. B.Diversification eliminates both idiosyncratic risk and systematic risk. C.There is no clear relationship between the volatility and return of individual stocks. D.The market portfolio contains all shares of all stocks and securities in the market. | 2)Which statement below is an appropriate characterization of the asset beta? A. The asset beta is an estimate of the systematic risk a stock would have once leverage is added into the analysis. B.The asset beta is larger than the equity beta for small stocks. C.The asset beta is readily observable for comparable firms. D. The asset beta is an estimate of the systematic risk a stock would have in the absence of leverage
Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.13P
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