Investors can reduce risk by holding more than one asset in a portfolio. True or false?
By investing more than one assets reduce the risk . So the above statement is true
Investors can reduce risk by holding more than one asset in a portfolio. True or false?
True or False: A portfolio combining two assets with less than perfectly positive correlation can reduce total risk to a level below that of either of the components.
PLEASE EXPLAIN WHY ANSWER IS TRUE OR FALSE: "Risk aversion" implies that investors require higher expected returns on riskier than on less risky securities. a. True b. False When adding a randomly chosen new stock to an existing portfolio, the higher (or more positive) the degree of correlation between the new stock and stocks already in the portfolio, the less the additional stock will reduce the portfolio's risk. a. True b. False An individual stock's diversifiable risk, which is measured...
More can be said about risk, especially as to its nature, when we own more than one asset in our investment portfolio.” Define risk and explain how risk is affected if we diversify our investment by holding a variety of securities? Thanks :)
One key result of applying the Capital Asset Pricing Model is that the risk and return of an individual security should be analyzed by how that security affects the risk and return of the portfolio in which it is held. True False Portfolio diversification reduces the impact of market risk on the portfolio. True False Market risk refers to the tendency of a stock to move with the general economy. A stock with aboveaverage market risk will tend to be...
True or False: In no case will creating portfolios of assets result in greater risk than that of the riskiest asset included in the portfolio.
Which statement is TRUE? a) All of these statements are false b) The measure of risk for a security held in a diversified portfolio is standard deviation c) As more stocks are added to a portfolio, total risk is expected to fall but at an increasing rate. So if one were to invest in enough stocks, total risk could be eliminated. d) Diversification reduces the portfolio’s expected return because it reduces the portfolio’s total risk e) Proper diversification can reduce...
Discuss which type of risk matters to rational investors and why. In addition, explain how investing in more than one asset can reduce risk through diversification. short and correct answer please
True or False Although inventory is viewed as an asset on the balance sheet, holding excessive amounts of inventory can erode firm value.
which of the following statement is true regarding the selection of a portfolio from this e that lie on the capital allocation line? a. less risk-averse investors will invest more in the risk -free security and less in the optimal risky portfolio than more risk averse investors. b. more risk-averse investors will invest less in the optimal risky portfolio and more in the risk-free security than less risk -averse investors. c. all investors will have the same capital allocation d....
In general, investors prefer compounding interest on their investments instead of simple interest. True False Bond holders have first claim on assets in the event of a bankruptcy, so they are less risky than common stock. True False An asset or stock with a beta less than 1.0 means the stock is more risky than the market in general. True False