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2. Jane has a portfolio of 20 average stocks, and Dick has a portfolio of 2 average stocks. Assuming the market is in equilibrium, which of the following statements is CORRECT? Explain.
a. Jane's portfolio will have less diversifiable risk and also less market risk than Dick's portfolio.
b. The required return on Jane's portfolio will be lower than that on Dick's portfolio because Jane's portfolio will have less total risk.
c. Dick's portfolio will have more diversifiable risk, the same market risk, and thus more total risk than Jane's portfolio, but the required (and expected) returns will be the same on both portfolios.
d. If the two portfolios have the same beta, their required returns will be the same, but Jane's portfolio will have less market risk than Dick's.
e. The expected return on Jane's portfolio must be lower than the expected return on Dick's portfolio because Jane is more diversified.
1. Which of the following statements is CORRECT?
a. If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio.
b. If you were restricted to investing in publicly traded common stocks, yet you wanted to minimize the riskiness of your portfolio as measured by its beta, then according to the CAPM theory you should invest an equal amount of money in each stock in the market. That is, if there were 10,000 traded stocks in the world, the least risky possible portfolio would include some shares of each one.
c. If you formed a portfolio that consisted of all stocks with betas less than 1.0, which is about half of all stocks, the portfolio would itself have a beta coefficient that is equal to the weighted average beta of the stocks in the portfolio, and that portfolio would have less risk than a portfolio that consisted of all stocks in the market.
d. Market risk can be eliminated by forming a large portfolio, and if some Treasury bonds are held
a manufacturer charges $24 for headphones and has been selling 1000 of them per week. He estimated that for every $1 price reduction, 100 more headphones can be sold per week. What price should he charge for the headphones to maximize his total profit? Show your work.
the sum of all decimal number 0.xyz (where x, y, and z are distinct digits) are...
6cos^2x-7cosx+2=0
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a student stands a certain distance from a building and measures the angle to the top of the building 18.8. the student then walks 24n straight towards the build and measures the angle to the top of the building as 20.2 what is the height of the building
an object has a mass of 100 grams and a volume of 20 cubic centimetres. what is its density?
If a progectile is thrown horizontally from a height of 5m what is the range if the initial speed is 10 m/s
