Question: 2 State whether the following statements are true or false. a. The expected rate of return on an investment with a beta of 2.0 is

2 State whether the following statements are true or false. a. The expected rate of return on an investment with a beta of 2.0 is twice as high as the expected rate of return of the market portfolio. b. The contribution of a stock to the risk of a diversified portfolio depends on the market risk of the stock. c. If a stock's expected rate of return plots below the security market line, it is underpriced. d. A fully diversified portfolio with a beta of 2.0 is twice as volatile as the market portfolio. e. An undiversified portfolio with a beta of 2.0 is twice as volatile as the market portfolio

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