Which of the following is not required to compute the standard deviation of a two-stock portfolio? Answer
the variance in returns on each stock the amount invested in each stock the correlation between the returns on each stock the expected return on a risk-free asset The total risk of a well-diversified international portfolio of stocks appears to be about what proportion of the risk of an average one-stock
portfolio? Answer one-third one-half two-thirds three-fourths
If the _____________ of a stock is known an investor can use the security market line to determine the expected return on that stock.
Answer standard deviation beta coefficient of variation unsystematic risk