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:

Monopolists

Individuals or entities that hold a monopoly, controlling the entire supply of a good or service in a particular market, eliminating competition.

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust to market conditions.

Plant Size

The physical capacity or scale of a manufacturing facility, which can influence production output and operational efficiency.

Factors Of Production

The resources used in the creation of goods or services, traditionally categorized into land, labor, capital, and entrepreneurship.