As Diversification Increases, the Standard Deviation of a Portfolio Approaches

question 79

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.
• E) None of the options are correct.

---

Definitions:

Freedom of the Press

The freedom to distribute and share thoughts, beliefs, and information without interference or suppression from the government.

Religious Fundamentalism

A strict adherence to specific theological doctrines typically in reaction against what its followers perceive as a dangerous modernism, leading to an emphasis on purity and the desire to return to a previous ideal from which believers have begun to drift.

Eighteenth Century

The period of time from January 1, 1701, through December 31, 1800, marking the 18th century of the Gregorian calendar, a period noted for significant economic, cultural, and political changes in history.

Father Junípero Serra

Missionary who began and directed the California mission system in the 1770s and 1780s. Serra presided over the conversion of many Indians to Christianity, but also engaged them in forced labor.