Which of the Following Statements Is True

question 19

Multiple Choice

Which of the following statements is true?

• A) Diversification reduces idiosyncratic risk but not aggregate risk.
• B) Diversification reduces aggregate risk but not idiosyncratic risk.
• C) Diversification reduces both idiosyncratic risk and aggregate risk but it reduces idiosyncratic risk by more.
• D) Diversification requires an investor to hold at least 100 shares in her portfolio to begin to reduce risk significantly.

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Definitions:

Infectious Agent

A microorganism or pathogen that can cause disease or illness in its host.

Susceptible Host

An individual who is at increased risk of developing an infection or disease due to specific conditions or lack of immunity.

Contaminated Dressings

Wound coverings that have been exposed to pathogens, potentially leading to infection.

Plastic Bag

A flexible, thin container made of plastic, often used for carrying or storing items, and a significant contributor to plastic pollution if not disposed of properly.