Which of the Following Statements About Diversification Is (Are) Correct

question 28

Multiple Choice

Which of the following statements about diversification is (are) correct?
I. Diversification may be able to reduce the risk of a portfolio to less than the weighted average risk of the assets.
II. Diversification is always prudent and should be expanded to include new, unrelated products whenever possible.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Neither statement I nor II is correct.

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Definitions:

Probable Cause

A reasonable basis for believing that a crime may have been committed or that evidence of the crime is present in the place to be searched.

Subpoena

A subpoena is a legal document that orders an individual or organization to appear in court or produce documents relevant to a legal case.

Federal Trade Commission

A federal agency responsible for protecting consumers and maintaining competition in the marketplace by preventing anticompetitive, deceptive, and unfair business practices.

Procedural Rules

Regulations that outline the process by which courts hear and determine what happens in civil lawsuit, criminal or administrative proceedings.