What Happens to the Amount of Market Risk as the Number

question 49

Multiple Choice

What happens to the amount of market risk as the number of assets in a portfolio increases?

• A)It decreases.
• B)It increases.
• C)It remains constant.
• D)It changes randomly.

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Definitions:

Aggregate Demand

The all-inclusive demand for products and services within an economic framework, priced at a specific level throughout a determined timeframe.

Long Run

A period during which all factors of production and costs are variable, allowing for full adjustment to changes.

Long-Run Equilibrium

A state in which all inputs and outputs in an economy are fully adjusted so that there is no tendency for change.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, an indicator of inflation.