Multiple Choice
Which of the following is not correct?
A) There is a greater reduction in risk by increasing the number of stocks in a portfolio from 1 to 10, than by increasing it from 100 to 120 stocks.
B) The historical rate of return on stocks has been about 5 percentage points higher than the historical rate of return on bonds.
C) Stock in an industry that is very sensitive to economic conditions is likely to have a higher average return than stock in an industry that is not so sensitive to economic conditions.
D) If you had information about a corporation that no one else did, you could earn a very high rate of return.This contradicts the efficient market hypothesis.
Correct Answer:
Verified
Correct Answer:
Verified
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