Which of the Following Statements Best Describes What You Should

question 10

Multiple Choice

Which of the following statements best describes what you should expect if you randomly select stocks and add them to your portfolio?

• A) Adding more such stocks will reduce the portfolio's unsystematic,or diversifiable,risk.
• B) Adding more such stocks will increase the portfolio's expected rate of return.
• C) Adding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk.
• D) Adding more such stocks will have no effect on the portfolio's risk.
• E) Adding more such stocks will reduce the portfolio's market risk but not its unsystematic risk.

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Definitions:

Open Processing

A computational paradigm often used in creative coding and visual arts, where the software environment allows for open-ended exploration and creation.

Figure And Ground

A principle in visual perception that involves distinguishing an object (figure) from its surrounding area (ground).

Sensation And Perception

The processes by which we receive, interpret, and give meaning to sensory information from our environment.

Proximity

The closeness of physical or psychological elements, influencing relationships and perception.