Which of the following statements is FALSE? Over any given period, the risk of holding a...

Which of the following statements is FALSE?

		Over any given period, the risk of holding a stock is that the dividends plus the final stock price will be higher or lower than expected, which makes the realized return risky.
		Because investors are risk averse, they will demand a risk premium to hold unsystematic risk.
		Because investors can eliminate firm-specific risk "for free" by diversifying their portfolios, they will not require a reward or risk premium for holding it.
		The risk premium for diversifiable risk is zero, so investors are not compensated for holding firm-specific risk.

Expert Solution

jeff jeffy answered 2 years ago

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