Rather Than Invest in the Stock of Just One or Two

question 60

Multiple Choice

Rather than invest in the stock of just one or two companies, you purchase a variety of different types of investments in order to minimize risk. What is this approach known as?

• A) insider trading
• B) investment apportionment
• C) asset allocation
• D) asset turnover

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Definitions:

Irrelevant

Pertains to information or factors that do not influence or impact a decision-making process.

Split-off Point

The stage in a production process where joint products are identifiable or separable into individual products.

Avoidable Cost

An expense that can be eliminated if a particular decision is made, not incurred if a specific activity is discontinued.

Fixed Production Cost

The portion of total production costs that does not change with the level of output, including costs such as rent, salaries, and insurance.