Portfolio a Has but One Security, While Portfolio B Has

question 25

True/False

Portfolio A has but one security, while Portfolio B has 100 securities. Because of diversification, we know that Portfolio B will have the lower market risk; that is, Portfolio B will have the lower beta.

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Definitions:

Vibrio Cholerae

A bacterium that causes cholera, a severe diarrheal illness, through contaminated water or food.

Helicobacter Pylori

A type of bacteria that infects the stomach lining and can cause ulcers and sometimes lead to stomach cancer.

Chemoautotrophs

Organisms that obtain their energy through the chemical oxidation of inorganic substances and use that energy to synthesize organic compounds from carbon dioxide.