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10 April, 02:56

A. if you found a stock with a zero historical beta and held it as the only stock in your portfolio, you would by definition have a riskless portfolio.

b. the beta of a portfolio of stocks is always larger than the betas of any of the individual stocks.

c. the beta of a portfolio of stocks is always smaller than the betas of any of the individual stocks.

d. it is theoretically possible for a stock to have a beta of 1.0. if a stock did have a beta of 1.0, then, at least in theory, its required rate of return would be equal to the risk-free (default-free) rate of return, rrf.

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  1. 10 April, 03:26
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    Answer is c. the beta of a portfolio of stocks is always smaller than the betas of any of the individual stocks.
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