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A diversified portfolio increases systematic risk reduces unsystematic risk redu

ID: 2639180 • Letter: A

Question

A diversified portfolio

increases systematic risk

reduces unsystematic risk

reduces systematic risk

increases unsystematic risk

The risk-adjusted required rate of return excludes

the risk-free rate

the stock's beta

the stock's standard deviation

the anticipated return on the market

The yield to maturity on a bond is

interest plus price appreciation (or loss) achieved by holding the bond to maturity

the bond's coupon divided by the principal amount

the price appreciation earned by the bond

the interest paid divided by the price of the bond

a.

increases systematic risk

b.

reduces unsystematic risk

c.

reduces systematic risk

d.

increases unsystematic risk

Explanation / Answer

Hi,

Please find the answer as follows;

a) reduces unsystematic risk

b) the risk-free rate

c) interest plus price appreciation (or loss) achieved by holding the bond to maturity

Thanks.

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