Which of the following statements is FALSE?
A) The risk premium of a security is determined by its systematic risk and does not depend on its diversifiable risk.
B) When we combine many stocks in a large portfolio, the firm-specific risks for each stock will average out and be diversified.
C) Fluctuations of a stock's return that are due to firm-specific news are common risks.
D) The volatility in a large portfolio will decline until only the systematic risk remains.
Answer: C
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Which of the following statements is true about code law?
A) In code-law countries, intellectual property rights are established by prior use. B) It is established based on the rulings from previous cases. C) It uses written norms, which are complemented by court decisions. D) In code-law countries, companies are granted the ability to operate by public authority.
When a company acquires treasury stock, what effect does this transaction have on earnings per share and legal capital, respectively?
A) decrease, increase B) increase, decrease C) decrease, decrease D) increase, none
According to the chapter-ending case study, all of the following are examples of big tech firms that have engaged in activities that raise antitrust issues, except:
A. Amazon B. Apple C. Google Drive D. Facebook
Law is not a perfect mechanism for ensuring good corporate and employee behavior
Indicate whether the statement is true or false a. True b. False