Which of the following statement is false?Group of answer choicesDiversification reduces the risk of a portfolio because the prices of different securities do not move exactly together.A risk premium can be measured as the difference between a security's return and the Treasury bill return.The beta of a well-diversified portfolio is equal to the value weighted average beta of the securities included in the portfolio.The portfolio risk that cannot be eliminated by diversification is called unique risk.

When a portfolio is diversified, what type of risk is reduced?Group of answer choicesunsystematic risksystematic risk

Which of the following statement is false?Group of answer choicesThe risk of a well-diversified portfolio depends on the market risk of the securities included in the portfolio.The variability of a well-diversified portfolio mostly reflects the contributions to risk from the standard deviations of the stocks within that portfolio.If returns on two stocks tended to move in opposite directions, then the covariances and correlations on the two stocks would be negative.Diversification can reduce portfolio risk even in the case when correlations across stock returns equal zero.

Even if the portfolio is well diversified, the investor is still exposed to Blank______ risk.Multiple choice question.systematicmeanmultipliedunknown

Which statement is correct regarding the following information? - Shares in company A have an expected return of 8%, standard deviation of 15%  and beta coefficient of 1.3- Shares in company B have an expected return of 12%, standard deviation of 25% and beta coefficient of -0.75.Group of answer choicesIn a single asset portfolio, security A would be riskier because its coefficient of variation is higher than security B.In a single asset portfolio, security B would be riskier because its coefficient of variation is higher than security ASecurity A is less risky if held in a diversified portfolio because of its positive correlation with market portfolioSecurity B is riskier if held in a diversified portfolio because of its beta coefficient of –0.75None of the options is correct.

An efficient portfolio:Group of answer choiceshas only unique risk.provides the highest expected return for a given level of risk and provides the least risk for a given level of expected return.has no risk at all.provides the highest expected return for a given level of risk.