Partitioning a Population into Hierarchical Groups or Levels,and Selecting a Sample

question 15

Multiple Choice

Partitioning a population into hierarchical groups or levels,and selecting a sample from each group or level is known as:

• A)simple random sampling.
• B)stratified sampling.
• C)systematic sampling.
• D)judgment sampling.

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Definitions:

Systematic Risk

The danger that affects the whole market or a specific segment of the market, commonly referred to as market risk.

Unsystematic Risk

The risk specific to an individual asset or company, such as management decisions or product recalls, which can be mitigated through diversification.

Diversification

An investment strategy that involves spreading investments among various financial instruments, industries, or other categories to minimize risk.

Diversifiable Risk

The risk that can be reduced or eliminated from a portfolio through diversification, as opposed to non-diversifiable risk.