For Diversification to Reduce Risk

question 1

Multiple Choice

For diversification to reduce risk,

• A)the returns on the individual securities should be highly correlated
• B)the prices of the stocks should be stable
• C)the returns on the individual securities should be negatively correlated
• D)one firm should offer dividends and the other should offer capital gains

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Definitions:

Maximum Current

Refers to the highest amount of electrical current that can flow through a specific device or conductor without causing damage or failure.

True Power

The actual power consumed by an electrical device, measured in watts, which represents the productive work done.

RLC Parallel Circuit

An RLC parallel circuit is an electrical circuit composed of resistors (R), inductors (L), and capacitors (C) connected in parallel, each affecting the circuit's overall impedance and resonance.

Applied Voltage

The voltage that is externally applied to an electrical circuit or device, driving the current through it.