Kim Invests in the Market, and Thus, She Is Subject

Multiple Choice

Kim invests in the market, and thus, she is subject to market risks. By diversifying her portfolio, she can minimize price volatility or at least keep the volatility of returns equal to or less than the market in which she invests. She can use statistical measures such as the standard deviation or beta to measure her ability to minimize volatility. If Kim wants her risk to equal that of the market, she should invest in stocks with

A) a beta of 1.0.
B) betas greater than 1.0.
C) betas less than 1.0.
D) a beta of 0.1.
E) betas greater than 0.1.