31) As you add more stocks to a portfolio: A. specific risk is increasingly diversified away....

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31) As you add more stocks to a portfolio: A. specific risk is increasingly diversified away. B. specific risk at first falls, then rises. C. market risk is increasingly diversified away. D. market risk declines but specific risk rises. 32) If a security plots below the security market line, it is: A. underpriced, a situation that should be temporary B. ignoring all of the security's specific risk. C. a defensive security, which expects to offer lower returns. D. offering too little retum to justify its risk 33) A stock's beta measures the A. average return on the stock. B. difference between the return on the stock and the return on the market portfolio C. sensitivity of the stock's returns to those of the market portfolio D. market risk premium on the stock. 31) As you add more stocks to a portfolio: A. specific risk is increasingly diversified away. B. specific risk at first falls, then rises. C. market risk is increasingly diversified away. D. market risk declines but specific risk rises. 32) If a security plots below the security market line, it is: A. underpriced, a situation that should be temporary B. ignoring all of the security's specific risk. C. a defensive security, which expects to offer lower returns. D. offering too little retum to justify its risk 33) A stock's beta measures the A. average return on the stock. B. difference between the return on the stock and the return on the market portfolio C. sensitivity of the stock's returns to those of the market portfolio D. market risk premium on the stock.

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Answer 31 option A specific risk is increasingly diversified away As you add more stock systematic r... View the full answer