Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 29

Evaluate whether the following statements are true or false.
a. Risk is measured by looking at the expected value (average) of an asset's returns over time.
b. Market risk can be minimized with a welldiversified portfolio.
c. Idiosyncratic risk is unique to a particular asset, rather than to the market as a whole.
d. A portfolio of well-diversified assets will often be less risky for the same level of return when compared to an individual asset.