Which of the following is/are true? a. Most of the unsystematic risk is removed

Question

Which of the following is/are true?

    a. Most of the unsystematic risk is removed by the time a portfolio contains 30 stocks.

    b. Two points on the Characteristic Line are the T-bill and the market portfolio.

    c. The greater the total risk of an asset, the greater the expected return.

    d. All securities have a beta between 0 and 1.

Q50. One bank offers you 4% interest compounded semiannually. What is the equivalent rate if interest is compounded quarterly?

    a. 3.98%

    b. 3.96%

    c. 3.92%

    d. 1.00%

Explanation / Answer

Options A, B and C

Q50,

Equivalnet rate compounded quarterly = (1.021/2 - 1 )*4 = 3.98%

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