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What was a main conclusion of Chapter 11 on risk and modern portfolio theory? Th

ID: 2736181 • Letter: W

Question

What was a main conclusion of Chapter 11 on risk and modern portfolio theory?

That net present value is the best financial decision rule for a portfolio

That investors will be indifferent when choosing between two portfolios that have equal expected return

That beta measures the risk of a stock held by itself

That the stock market is efficient

That portfolio risk is not a weighted average of individual risks in the portfolio

a.

That net present value is the best financial decision rule for a portfolio

b.

That investors will be indifferent when choosing between two portfolios that have equal expected return

c.

That beta measures the risk of a stock held by itself

d.

That the stock market is efficient

e.

That portfolio risk is not a weighted average of individual risks in the portfolio

Explanation / Answer

e. That portfolio risk is not a weighted average of individual risks in the portfolio

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