The Reality of the Expression "It's a Small World" Is

question 97

Multiple Choice

The reality of the expression "it's a small world" is that

• A) there is no interconnection throughout the world.
• B) people are interconnected in close social networks regardless of their sex, race, and social class.
• C) the world is a small place for most people in it.
• D) the world is only a small place for those in one's immediate network (those who share the same race, class, and sex).

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Definitions:

Diversifiable Risk

A type of risk that can be reduced or eliminated from a portfolio through investments in a variety of assets, also known as unsystematic risk.

Arbitrage Pricing Model

A theory for asset pricing that takes into account multiple risk factors and the return of an asset, assuming no arbitrage opportunities.

Characteristic Line

In finance, this is a line generated in a statistical plot to describe how the returns of a security relate to the returns of the overall market, used in the Capital Asset Pricing Model (CAPM).

Market Risk

The risk of losses in investments due to factors that affect the entire market, such as economic recessions or political instability.