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.

Understand the concept of Leader-Member Exchange (LMX) theory and its significance in leadership.

Identify and describe the phases of relationship development in LMX theory.

Understand the implications of high-quality and low-quality LMX relationships on organizational outcomes.

Recognize the impact of LMX on follower's behavior and performance within the organization.

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Definitions:

Life Stress Theory

A psychological theory that examines how stress from life events affects an individual's mental and physical health.

Self-blame Theory

A psychological concept proposing that individuals may attribute personal failures or negative events to their own actions or shortcomings, potentially leading to feelings of guilt and inadequacy.

Artifact Theory

A hypothesis that suggests observed differences in certain measurements or outcomes are not due to the actual difference in what is being measured but to the method of measurement.

Lack-of-control Theory

A theory suggesting that the inability to exert control over one's environment or self can lead to psychological disorders.