Increasing the Number of Securities in a Portfolio Reduces the Unsystematic

question 28

True/False

Increasing the number of securities in a portfolio reduces the unsystematic risk but not the systematic risk.

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Definitions:

Favorable

A term often used in financial and operational reporting to indicate better-than-expected performance or results.

Unfavorable

A situation or condition that is disadvantageous, harmful, or detrimental, often used in financial contexts to describe variances or outcomes that negatively impact performance.

Labor Rate Variance

The difference between the actual labor rate paid and the standard labor rate expected, multiplied by the actual hours worked.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, reflecting efficiency in material use.