Which of the Following Describes What Will Occur as You

question 86

Multiple Choice

Which of the following describes what will occur as you randomly add stocks to your portfolio?

• A) The nondiversifiable risk will decrease.
• B) Both the diversifiable and nondiversifiable risk will decrease.
• C) The portfolio return will increase.
• D) The diversifiable risk will decrease.

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Definitions:

Observable Behaviors

Actions or reactions of individuals, directly visible and measurable, used in the study of psychology and sociology.

Covert Behavior

Behavior that is not openly acknowledged or displayed, often hidden or secretive, contrasting with overt behavior that is readily observable.

Overt Behavior

Any observable action or response made by an individual that can be seen and measured by others.

Mental Process

Internal cognitive operations that include thinking, perceiving, remembering, and decision-making.