Question: Enter problem statement here. Which of the following statements is FALSE? O A. Because investors are risk averse, they will demand a risk premium to

Enter problem statement here. Which of the following statements is FALSE? O A. Because investors are risk averse, they will demand a risk premium to hold unsystematic risk. B. Because investors can eliminate firm-specific risk "for free" by diversifying their portfolios, they will not require a reward or risk premium for holding it. C. The risk premium for diversifiable risk is zero, so investors are not compensated for holding firm-specific risk D. Over any given period, the risk of holding a stock is that the dividends plus the final stock price will be higher or lower than expected, which makes the realized return risky
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
