Question: State and explain whether the following statements are true or false, (a) The beta of a portfolio must be larger than the beta of any
State and explain whether the following statements are true or false,
(a) The beta of a portfolio must be larger than the beta of any of its constituent stocks.
(b) If a security lies above the security market line (SML), then it must be overpriced .
(c) If CAPM is valid, then a stock having more volatile returns must have larger expected return than a stock with less volatile returns to compensate for higher risk borne .
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