As Diversification Increases, the Total Variance of a Portfolio Approaches

question 64

Multiple Choice

As diversification increases, the total variance of a portfolio approaches

• A)0.
• B)1.
• C)the variance of the market portfolio.
• D)infinity.

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Definitions:

Bullies

Individuals who use power, strength, or influence to harm or intimidate those who are weaker, often through repeated aggressive or manipulative behaviors.

Autonomous Interdependence

The concept where individuals are self-governing yet maintain a sense of mutual reliance and connection within their relationships or groups.

Fair-Weather Cooperation

An interaction wherein individuals cooperate with others only when it is to their immediate benefit or when conditions are favorable.

Intimate Friendships

Deep and close relationships characterized by a high level of trust, emotional support, and understanding, often developing over time.