Which of the Following Statements Is Most Correct

question 47

Multiple Choice

Which of the following statements is most correct?

• A) If you add enough randomly selected stocks to a portfolio, you can completely eliminate all the market risk from the portfolio.
• B) If you form a large portfolio of stocks each with a beta greater than 1.0, this portfolio will have more market risk than a single stock with a beta = 0.8.
• C) Company-specific (or unsystematic) risk can be reduced by forming a large portfolio, but normally even highly diversified portfolios are subject to market (or systematic) risk.
• D) Answers a, b, and c are correct.
• E) Answers b and c are correct.

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Definitions:

Electra Complex

A psychoanalytic theory introduced by Carl Jung, suggesting a girl's psychosexual competition with her mother for possession of her father.

Observation And Imitation

The process by which individuals learn new behaviors or skills by watching and mimicking others.

Gender Stability

The understanding and recognition that one's gender remains constant over time and across situations.

Identification

In Freudian theory, the process by which a young child adopts characteristics, beliefs, attitudes, values, and behaviors of the parent of the same sex.