Which of the following statements is FALSE? The risk premium of a security is determined...
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Which of the following statements is FALSE? The risk premium of a security is determined by only its systematic risk but not its diversifiable risk. Stock returns will tend to move together if they are affected similarly by economic events. The volatility in a large portfolio will decline until only the systematic risk remains. When we combine many stocks in a large portfolio, the firm-specific risks for each stock will average out and be diversified. The primary purpose of portfolio diversification is to eliminate all risks
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Which of the following statements is FALSE? The risk premium of a security is determined by only its systematic risk but not its diversifiable risk. Stock returns will tend to move together if they are affected similarly by economic events. The volatility in a large portfolio will decline until only the systematic risk remains. When we combine many stocks in a large portfolio, the firm-specific risks for each stock will average out and be diversified. The primary purpose of portfolio diversification is to eliminate all risks 