As the Number of Stocks in a Person's Portfolio Increases

question 28

Multiple Choice

As the number of stocks in a person's portfolio increases,

• A)the risk of the portfolio increases,as indicated by the increasing value of the standard deviation of the portfolio.
• B)the risk of the portfolio increases,as indicated by the decreasing value of the standard deviation of the portfolio.
• C)the risk of the portfolio decreases,as indicated by the increasing value of the standard deviation of the portfolio.
• D)the risk of the portfolio decreases,as indicated by the decreasing value of the standard deviation of the portfolio.

---

Definitions:

Payables Period

The length of time a company takes to pay its invoices to suppliers, reflecting its payment policy's efficiency.

Accounts Receivable Balance

The sum total of debts customers have towards a company for delivered goods or services which have not been paid for yet.

Wholesale Cost

The price charged for a product by the wholesaler, which is typically lower than the retail price.

Accounts Payable Balance

The total amount of money a company owes to its suppliers or creditors at a given point in time.