If You Build a Large Enough Portfolio, You Can Diversify

question 2

Multiple Choice

If you build a large enough portfolio, you can diversify away all risk, but you will be left with risk.

• A) systematic, undiversifiable
• B) diversifiable, diversifiable
• C) unsystematic, systematic
• D) diversifiable, unsystematic

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Definitions:

Forbidden Impulse

Refers to an unconscious desire or thought that is deemed unacceptable or taboo by societal standards, often suppressed or repressed.

Anxiety

An emotion of apprehension, concern, or discomfort, often regarding an upcoming event or an unpredictable result.

Impulse Gratification

The act of satisfying an immediate desire or urge, often without consideration of the long-term consequences.

Superego

In psychoanalytic theory, the part of the personality responsible for moral standards and ideals, functioning to suppress the urges of the id and striving to act in a socially acceptable manner.