The sharpe measure is based on the concept of total risk so


True or False

1) The Sharpe measure is based on the concept of total risk, so it is appropriate for evaluating only the diversified portfolios

2) For a portfolio comprised of 2 stocks, diversification exists only if the correlation coefficient between the stocks is negative

3) The factor, Rm-Rf, can be regarded as a zero-investment portfolio, in which one borrows at the market portfolio rate of return to invest in the risk-free assets

4) A well-specified model should include all the relevant factors and yet exclude any factor that is not relevant.

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Financial Management: The sharpe measure is based on the concept of total risk so
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