Investors May Reduce Risk by Constructing Diversified Portfolios but Not

question 8

True/False

Investors may reduce risk by constructing diversified portfolios but not eliminate risk.

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Definitions:

Prepaid Insurance

An asset account that represents payments made for insurance coverage before the coverage period.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to ensure accuracy.

Accounts Receivable

Dues from clients to a corporation for goods or services already benefited from but yet to be paid for.

Debit Entries

Accounting records that increase an asset or expense account, or decrease a liability, equity, or revenue account.