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which statement is true? multiple choice the expected rate of return on any portfolio must be positive. the beta of any portfolio must be 1.0. the arithmetic average of the betas for each security held in a portfolio must equal 1.0. the weights of the securities held in any portfolio must equal 1.0. the standard deviation of any portfolio must equal 1.0.

User YouBee
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Final answer:

The only true statement is that the weights of the securities in a portfolio must sum up to 1.0, which represents the entire portfolio value.

Step-by-step explanation:

The true statement among the provided options is that the weights of the securities held in any portfolio must equal 1.0. This is a fundamental principle in portfolio management signifying that the entire portfolio is represented as 100%, or in fractional terms, the sum of weights is 1. Other statements provided, such as the expected rate of return being always positive, the beta of any portfolio being 1.0, or the standard deviation being 1.0, are not true. The expected rate of return can be negative if the portfolio experiences losses. Beta represents the systematic risk of a security or portfolio in relation to the market and can be greater than or less than 1.0. Lastly, the standard deviation indicates the amount of risk or volatility associated with the return of the investment; it is not fixed at any value, including 1.0.

User StephenS
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