Diversification Can Reduce the Riskiness of a Portfolio of Stocks

question 119

True/False

Diversification can reduce the riskiness of a portfolio of stocks.

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Definitions:

Novation

The act of replacing an old obligation with a new one, thereby extinguishing the original obligation.

Privity of Contract Rule

A legal principle stating that only parties involved in the creation of a contract can sue or be sued under the terms of that contract.

Statutory Assignment

A legal transfer of a right from one party to another, made under and governed by statutory law.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money either on demand or at a set time.