ACC501 GDB NO. 1 SPRING 2013 SOLUTION

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GDB NO. 1 SPRING 2013
Ali wants to invest in the stock market while making its total risk zero by creating a unique portfolio. In this mode, he starts from choosing a single stock and adding multiple stocks to this one in order to develop a series of portfolios of his choice. Number of securities range from 1 to 1,000 in the different designed portfolios but he remains unable to get his desired risk level. Despite of rigorous computations, the risk level is still away from zero.

Required:
Can the total risk of portfolio be reduced exactly to zero? Why or why not? Discuss with conceptual rationale.


Important Instructions:

1. Your discussion comments must be based on logical facts.
2. Your comments should be brief and to the point. Avoid unnecessary details.
3. The GDB will remain open for 3 working days / 72 hours.
4. Do not copy or exchange your comments with other students. Two identical / copied comments will be marked Zero (0)
5. Obnoxious or ignoble comments should be strictly avoided.
6. Questions / queries related to the content of the Discussion Board, which may be posted by the students on MDB or via e-mail, will not be replied till the due date is over.


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