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Which statement is true? O The weights of the securities neld in any portfelio must ecual to The arithmetic averace of the be

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Answer #1

Statement 1 is true.

Total of the weight of securities in portfolio is always = 1.

Statement 2 is false. Arithmetic average of betas for each security in portfolio can be less than, more than or equal to 1.

Statement 3 is false. Expected rate of portfolio return can be zero, positive or negative.

Statement 4 is false. Standard deviation of portfolio can be anything > 0.

Statement 5 is false. Beta of portfolio can be more or less or equal to 1.0.

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