As Diversification Increases, the Standard Deviation of a Portfolio Approaches

question 11

Multiple Choice

As diversification increases, the standard deviation of a portfolio approaches

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

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Definitions:

Double-blind Procedure

A study design in which neither the participants nor the researchers know who is receiving a particular treatment, minimizing bias.

Drug-evaluation Studies

Research assessments that determine the efficacy, safety, and side effects of medications before they are approved for public use.

Research Participants

Individuals who volunteer or are selected to partake in scientific studies, contributing data through their experiences or responses.

Control Group

In an experiment, the group that is not exposed to the treatment; contrasts with the experimental group and serves as a comparison for evaluating the effect of the treatment.