B) False
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B) False
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A) The characteristic line is the regression line that results from plotting the returns on a particular stock versus the returns on a stock from a different industry.
B) The slope of the characteristic line is the stock's standard deviation.
C) The distance of the plot points from the characteristic line is a measure of the stock's market risk.
D) The distance of the plot points from the characteristic line is a measure of the stock's diversifiable risk.
E) "Characteristic line" is another name for the Security Market Line.
G) A) and C)
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A) The riskiness of the portfolio is greater than the riskiness of one or two of the stocks.
B) The beta of the portfolio is less than the betas of each of the individual stocks.
C) The beta of the portfolio is greater than the beta of one or two of the individual stocks' betas.
D) The beta of the portfolio can not be equal to 1.
E) The riskiness of the portfolio is less than the riskiness of each of the stocks if they were held in isolation.
G) C) and E)
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