Which statement is truea we would generally find that the, Ask an Expert

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Which statement is TRUE?

a) We would generally find that the beta of a single is more stable over time than the beta of a diversified portfolio.

b) If an investor buys enough stocks, he or she can, through diversification, eliminate all of the market risk inherent owning stocks, but as a general rule it will not be possible to eliminate all diversifiable risk.

c) A firm can change its beta through managerial decisions, including capital budgeting and capital decisions.

d) Under the CAPM, the required rate of return on a firm's common stock is determined only by the firm's standard deviation.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92306191

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