As We Increase the Number of Shares in a Portfolio

question 70

Multiple Choice

As we increase the number of shares in a portfolio, the standard deviation of returns of the portfolio

• A)decreases.
• B)increases.
• C)remains unchanged.
• D)none of the above

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Definitions:

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Price Floor

A government- or authority-imposed minimum price that can be charged for a product or service, often above the equilibrium price.

Network Externality

A situation where the value of a product or service increases as more people use it.

Intrinsic Value

The inherent or fundamental worth of something, not influenced by external factors or market conditions.