If a Person Diversifies Her Stock Portfolio, Then

question 45

Multiple Choice

If a person diversifies her stock portfolio, then:

• A) the expected return of her portfolio will increase.
• B) the risk of her portfolio will decrease.
• C) both the risk and expected return of her portfolio will increase.
• D) neither the risk nor the expected return of her portfolio will change.

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Definitions:

Performance

Execution or completion of duties or tasks as required or agreed upon in a contract.

Material Breach

A significant failure to perform a part of a contract that permits the other party to either demand performance or terminate the agreement.

Buyer's Obligations

The duties and responsibilities a buyer assumes in a transaction, such as paying the purchase price and complying with the terms of the agreement.

Contract

An agreement between two or more parties creating enforceable obligations.