1. Which of the following is INCORRECT?a All of a stock's risk could be unsystematic.b. A negative beta stock has an expected return less than the risk-free rate.c. Anticipated returns on any given stock are always greater than 0.d. Two assets with a correlation of -1 could be combined to create a portfolio with astandard deviation of zero (no risk).2. Which of the following measures the total risk of a portfolio?a. Betab. Standard Deviationc. Correlation Coefficientd. Alpha3. Which of the following stocks have the highest systematic risk?a A stock with high correlation to the market and high returm volatility.b. A stock with low correlation to the market and a high return volatility.c A stock with high correlation to the market and a low return volatility.d. A stock with low correlation to the market and a low return volatility.4. Which of the following companics have the lowest systematic risk?a A company that sells soups (Campbells), beta=0.60b. A coffee company (Starbucks), beta=1.20cA mid-range clothing store company (Abercrombie & Fitch), beta=1.25d. A motorcycle manufacturer (Harley-Davidson), beta=2.00

1. Which of the following is INCORRECT? a All of a stock's risk could be unsystematic. b. A negative beta stock has an expected return less than the risk-free rate. c. Anticipated returns on any given stock are always greater than 0. d. Two assets with a correlation of -1 could be combined to create a portfolio with a standard deviation of zero (no risk).

1. Which of the following is INCORRECT? a All of a stock's risk could be unsystematic. b. A negative beta stock has an expected return less than the risk-free rate. c. Anticipated returns on any given stock are always greater than 0. d. Two assets with a correlation of -1 could be combined to create a portfolio with a standard deviation of zero (no risk).

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 6E

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