2. Answer whether each of the following statements is correct and explain your argument. Total:...

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2. Answer whether each of the following statements is correct and explain your argument. Total: 20 marks. (a) Under an index model, the correlation between two individual stocks is one. (5 marks) (b) Well-diversified portfolios with a negative are under-priced. (5 marks) (c) An arbitrage portfolio arises when two or more security prices enable investors to construct a portfolio that will yield a positive return under all possible scenarios. (5 marks) (d) A well-diversified portfolio eliminates all risks

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