L-2 Morning Quiz Q 29

mail2arungoel
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Posts: 29
Joined: Mon Apr 23, 2012 9:45 pm

L-2 Morning Quiz Q 29

Postby mail2arungoel » Mon May 28, 2012 2:15 pm

The solution given is:
29. Ans. b) For a fully diversified portfolio there exists only systematic risk since the unsystematic risk has been diversified away. For a partially diversified portfolio there exists the systematic risk plus a part of the unsystematic risk that has not been diversified away. For a standalone asset there exists both systematic and unsystematic risk since none is diversified away. Hence the unsystematic risk of a fully diversified portfolio ≤ unsystematic risk of a partially diversified portfolio ≤ unsystematic risk of a standalone asset.

Whereas options in the question paper were different !!! :) Arun

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jaspreet.frm
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Posts: 13
Joined: Mon May 14, 2012 2:42 pm

Re: L-2 Morning Quiz Q 29

Postby jaspreet.frm » Wed May 30, 2012 4:18 pm

Hi Arun,

Could be please type the options on this forum . Because the question i have is having correct options.

For your reference:

29. Which of the following comparisons among standalone assets, partially diversified portfolio and fully diversified portfolios is most likely correct:
a) Systematic risk of a fully diversified portfolio ≤ Systematic risk of a partially diversified portfolio ≤ Systematic risk of a standalone asset
b) Unsystematic risk of a fully diversified portfolio ≤ Unsystematic risk of a partially diversified portfolio ≤ Unsystematic risk of a standalone asset
c) Standard deviation of a standalone asset ≤ Standard deviation of a partially diversified portfolio ≤ Standard deviation of a fully diversified portfolio

So, Option b is correct


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