Which One of the Following Approaches Will Increase the Level

question 20

Multiple Choice

Which one of the following approaches will increase the level of risk, provided the constituents of a portfolio are not perfectly positively correlated?

• A) Make the statistical interdependence between the securities more negative
• B) Decreasing the number of securities
• C) Reduce diversification
• D) Identify high profit investments

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Definitions:

Equilibrium Reaction

A chemical reaction in which the rates of the forward and reverse reactions are equal, resulting in no net change in the concentrations of the reactants and products.

K

K is the chemical symbol for potassium, an essential dietary mineral and electrolyte necessary for various bodily functions, including nerve transmission and muscle contraction.

Acetic Acid

A weak, organic acid with the formula CH3COOH, known for its pungent smell and sour taste, and used in the production of vinegar.

Equilibrium Reaction

A chemical reaction in which the rate of the forward reaction equals the rate of the reverse reaction, resulting in no net change in the concentrations of reactants and products.