Relative to the market as a portfolio with a beta of plus

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Which of the following statements is most correct? Select one: a. A portfolio with a beta of minus 2 has the same degree of risk to the holder, relative to the market, as a portfolio with a beta of plus 2. However the holder of either portfolio could lower his or her exposure by buying some "normal" stocks. b. A stock with a beta of −1.0 has zero systematic (or market) risk. c. It is possible for a stock to have a positive beta even in situations where the correlation between the returns on it and those on another stock are negative. d. Diversifiable risk, which is measured by beta, can be lowered by adding more stocks to a portfolio. e. Statements a and c are both correct.

Reference no: EM131052355

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