Which of the following statements is most correct? If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio. If you form a large portfolio of stocks each with a beta greater than 1.0, this portfolio will have more market risk than a single stock with a beta = 0.8. Company-specific risk can be reduced by forming a large portfolio, but normally even highly diversified portfolios are subject to market risk. Answers a, b, and c are correct. Answers b and c are correct.

Q: which one is correct? QUESTION 12 Exhibit 6B.1 USE THE INFORMATION BELOW FOR THE FOLLOWING…

A: W1 =  [E(σ1)2 − r1.2 E(σ1) E(σ2)]/[E(σ1)2 + E(σ2)2 − 2 r1.2 E(σ1) E(σ2)] when, r1.2 = -1 W1 = E(σ1)2…

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A: *Answer:

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A: Answer -

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