The Extent to Which Risk Is Reduced Through Portfolio Diversification

question 46

True/False

The extent to which risk is reduced through portfolio diversification primarily depends on the covariance between individual assets in the portfolio.

---

Definitions:

Charismatic Leadership

A leadership style characterized by an individual's ability to inspire, motivate, and foster enthusiasm among followers through personal charm and persuasive communication.

Follower Satisfaction

Refers to the degree to which followers or subordinates feel fulfilled and content with their leadership and organizational environment.

Leadership Effectiveness

The extent to which a leader is able to achieve desired results or outcomes through the direction, influence, and control of organizational resources.

Charisma

A quality of individuals that inspires devotion or attraction, marked by a strong personal magnetism and communication skills.