As Diversification Increases, the Unique Risk of a Portfolio Approaches

question 72

Multiple Choice

As diversification increases, the unique risk of a portfolio approaches

• A)1.
• B)0.
• C)infinity.
• D)(n - 1) * n.

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Definitions:

Accounts Payable Turnover Ratio

A liquidity metric that measures the rate at which a company pays off its suppliers by comparing net credit purchases to average accounts payable.

Working Capital

The disparity between an organization's immediate assets and liabilities, showcasing its short-term economic viability and effectiveness.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle of a business.

Withdraw

The act of removing funds from an account, typically from a bank or investment.