The Principle of Diversification States That Spreading an Investment Over

question 245

Multiple Choice

The principle of diversification states that spreading an investment over a number of assets will eliminate:

• A) All of the risk.
• B) All of the systematic risk and part of the unsystematic risk.
• C) All of the unsystematic risk and part of the systematic risk.
• D) Most of the systematic risk.
• E) Most of the unsystematic risk.

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Definitions:

Legal Realism

A theory in law that emphasizes the real-world outcomes of cases and the roles of judges and societal influences, rather than purely relying on abstract legal rules or doctrines.

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A legally recognized marriage between two individuals of the same sex.

Supreme Court

The highest judicial body in a country, specifically in the United States, it is the ultimate arbiter of federal constitutional law.

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An economic school of jurisprudence in which all costs and benefits of a law are given monetary values. Those laws with the highest ratios of benefits to costs are then preferable to those with lower ratios.