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Portfolio a Has but One Stock, While Portfolio B Consists

question 124

True/False

Portfolio A has but one stock, while Portfolio B consists of all stocks that trade in the market, each held in proportion to its market value.Because of its diversification, Portfolio B will by definition be riskless.


Definitions:

Foreign Corrupt Practices Act

A U.S. law that prohibits companies and their individuals from bribing foreign officials to gain a business advantage.

Antifraud Provisions

Legal measures designed to prevent fraudulent activities, especially in securities, financial transactions, and corporate practices.

1934 Act

Pertains to the 1934 Securities Exchange Act, which regulates U.S. securities trading and led to the creation of the SEC.

Securities Act of 1933

A U.S. law enacted to protect investors by requiring transparency in financial statements so investors can make informed decisions about securities.

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