Diversification Will Normally Reduce the Riskiness of a Portfolio of Stocks

question 37

True/False

Diversification will normally reduce the riskiness of a portfolio of stocks.

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Definitions:

Treasury Stock

Shares that were once a part of the outstanding shares but were bought back by the company, reducing the amount of stock on the open market.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Transactions

Economic events that affect a business's financial position, involving the transfer of assets, provision of services, or incurring of obligations.

Merchandise Inventory

Products that a retailer, wholesaler, or distributor has on hand to sell to customers.