In a Given Portfolio, Replacing an Existing Investment with a Lower

Multiple Choice

In a given portfolio, replacing an existing investment with a lower beta investment results in _____. 

A) an increase in the expected rate of rate return of the portfolio
B) a decrease in the actual rate of return of the portfolio
C) a decrease in the required rate of return of the portfolio
D) an increase in the systematic risk of the portfolio
E) the portfolio beta moving toward 1.0