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(Solved): According To The Following Information, Which Of The Stocks Would Be Considered Riskiest In A Divers...
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According to the following information, which of the stocks would be considered riskiest in a diversified portfolio of investments? Stock ABC 12.5% FGH 8.0% MNO 20.2% TUV 15.3% Stock MNO, because it has the highest standard deviation. Stock TUV, because it has the highest beta. Stock FGH, because it has the highest s/b ratio. Stock ABC, because its beta is the same as the market beta (1.0) and the market is always very, very risky.
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A diversified portfolio is a portfolio which is a group of investment products with different risk levels and yeilds. It seeks to lower assumed risk and leverage to a significant percentage of the v