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:

Asset Surrendered

A situation or transaction where an asset is given up by its owner, which could be due to sale, exchange, forfeiture, or similar circumstances.

Undepreciated Cost

Undepreciated cost refers to the original cost of an asset minus any depreciation that has been claimed to date, reflecting its current book value.

Business Automobile

A vehicle owned and used by a company for business operations or activities.

Market Value

The current price at which an asset or service can be bought or sold, determined by supply and demand dynamics in open markets.