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Diversification Works Because Forming Stocks into Portfolios Reduces the Standard

question 202

True/False

Diversification works because forming stocks into portfolios reduces the standard deviation of
returns for each stock.


Definitions:

Divorce

The legal dissolution of a marriage by a court or other competent body.

Easement

A right to cross or otherwise use someone else's land for a specified purpose.

Permission

Consent or authorization given by one party to another to do something that is not allowed without such consent.

Owner

An individual or entity that has legal title to, or vested interest in, property or assets.

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