Diversification of a Portfolio

question 118

Multiple Choice

Diversification of a portfolio

• A)can eliminate market risk,but it cannot eliminate firm-specific risk.
• B)can eliminate firm-specific risk,but it cannot eliminate market risk.
• C)increases the portfolio's standard deviation.
• D)is not necessary for a person who is risk averse.

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Definitions:

Autobiographical Memory

A personal narrative that helps children acquire an enduring sense of themselves.

Narrative Structures

The organized way a story or narrative is presented to the reader or audience, involving elements like plot, characters, and setting.

Larger Culture

The broader societal context that encompasses various norms, values, practices, and artifacts of a specific group or society.

Self-Descriptions

Refers to the ways individuals describe themselves, often revealing their self-concept and identity.