Please answer The benchmark for a well-diversified stock portfolio is the market portfolio,...
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The benchmark for a well-diversified stock portfolio is the market portfolio, which is a portfolio containing all stocks. The relevant risk of an individual stock is measured by its beta coefficient, which is defined under the Capital Asset Pricing Model (CAPM) as the amount of risk that the stock contributes to the well-diversified portfolio. Based on your understanding of the CAPM and beta, answer the following question: Which of the following statements about stock's correlation with the market is true? O A stock with low stand-alone risk will tend to destabilize the portfolio O A stock with a low correlation with the market is risky. A stock with a high correlation with the market is risky
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