a. The expected rate of return on an investment with a beta of 2 is
twice as high as the expected rate of return of the market
portfolio--true or false--why?
b. The contribution of a stock to the risk of a diversified portfolio
depends on the market risk of the stock true or false?
c. If a stock's expected rate of return plots below the security
market line, it is underpriced true or false?
d. A diversified portfolio with a beta of 2 is twice as volatile as
the market portfolio true or false?
e. An undiversified portfolio with a beta of 2 is twice as volatile as
the market portfolio true or false?