Question: Which of the following statement is true: Diversification will increase total risk. Unsystematic risk is significantly increased in large portfolios. Diversification will reduce idiosyncratic risk.

Which of the following statement is true: Diversification will increase total risk. Unsystematic risk is significantly increased in large portfolios. Diversification will reduce

Which of the following statement is true: Diversification will increase total risk. Unsystematic risk is significantly increased in large portfolios. Diversification will reduce idiosyncratic risk. Diversification will reduce systematic risk. Ausel's Furniture Stores has (semi-annual) bonds outstanding that mature in 5 years and have a 7 % coupon. These bonds have a face value of $1,000 and a current market price of $1,022. What is the company's pre-tax cost of debt? 6.48 % 6.65 % 7.20% None of the above

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