Diversification can increase the level of systematic risk. True False According to the CAPM, which of...

Diversification can increase the level of systematic risk.

True

False

According to the CAPM, which of the following is NOT related to the expected return on a stock?

	A.	pure time value of money as measured by the risk-free rate
	B.	amount of systematic risk as measured by beta
	C.	the reward for systematic risk as measured by the market risk premium
	D.	amount of risk as measured by the standard deviation

If a stock does not pay dividends which of the following must be true?

	A.	The P-E must be zero.
	B.	The stock price will fall.
	C.	The expected return is equal to the expected growth in price.
	D.	The stock must have a value of $0.

Expert Solution

The answers are as follows:

jeff jeffy answered 2 years ago

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