Diversification Cannot Reduce Market Risk

question 18

True/False

Diversification cannot reduce market risk.

---

Definitions:

Bond Yield

The return an investor realizes on a bond, calculated by the coupon payments relative to the market price of the bond.

Face Value

The nominal or dollar value stated on a financial instrument, such as a bond or stock, representing its worth at issuance or maturity.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.