Beta Is a More Relevant Measure of Risk to an Investor

question 89

True/False

Beta is a more relevant measure of risk to an investor with a well-diversified portfolio than to an investor who holds only one stock.

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Definitions:

Cultural Practices

The customs, rituals, and behaviors that are shared and practiced by members of a particular cultural or social group.

Outgroup Homogeneity Bias

The sociopsychological phenomenon by which members of a group to which one does not belong seem more alike than do members of a group to which one does belong.

In-Group Favoritism Bias

The tendency for individuals to give preferential treatment and express more positive attitudes towards members of their own group as opposed to those of out-groups.

Ethnocentric Error

The mistaken belief that one's own cultural or ethnic group is superior to others, often leading to judging other cultures solely by the values and standards of one's own.