An Increase in the Number of Corporations in a Portfolio

question 62

Multiple Choice

An increase in the number of corporations in a portfolio from 110 to 120 reduces

• A)market risk by more than an increase from 1 to 10.
• B)market risk by less than an increase from 1 to 10.
• C)firm-specific risk by more than an increase from 1 to 10.
• D)firm-specific risk by less than an increase from 1 to 10.

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Definitions:

Kinesthesis

The capability to feel the position, the weight, or the activity of muscles, tendons, and joints.

Vestibular Sense

A sensory system located in the inner ear that provides the leading contribution to the sense of balance and spatial orientation for the purpose of coordinating movement with balance.

Sensory Interaction

The process by which different senses like sight, hearing, and touch influence each other, affecting the way we perceive the world.

Nociceptors

Sensory receptors that detect harmful stimuli, sending pain signals to the brain in response to potentially damaging or dangerous conditions.