Which of the Following Statements Is CORRECT

question 5

Multiple Choice

Which of the following statements is CORRECT?

• A) An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks.
• B) The higher the correlation between the stocks in a portfolio,the lower the risk inherent in the portfolio.
• C) It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock.
• D) Once a portfolio has about 40 stocks,adding additional stocks will not reduce its risk by even a small amount.
• E) An investor can eliminate virtually all diversifiable risk if he or she holds a very large,well-diversified portfolio of stocks.

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Definitions:

Regulation

A set of rules or directives made and maintained by an authority.

Sexual Behavior

Actions or patterns relating to sexual acts, expressions, orientation, and relationships.

Socialization

The process by which individuals learn and adopt the norms, values, and behaviors appropriate to their society or social group.

Extended Family

A family structure that extends beyond the nuclear family, including grandparents, aunts, uncles, and other relatives.