The Principle of Diversification Tells Us That

question 198

Multiple Choice

The principle of diversification tells us that:

• A) Concentrating an investment in two or three large stocks will eliminate all of your risk.
• B) Concentrating an investment in two large stocks will cut your risk exactly in half.
• C) Spreading an investment across many diverse assets cannot (in an efficient market) eliminate any risk.
• D) Spreading an investment across many diverse assets will eliminate all of the risk.
• E) Spreading an investment across many diverse assets will eliminate some of the risk.

Understand the implications of expectancy in educational settings.

Identify the effects of social perceptions and reputations on interpersonal relations and opportunities.

Comprehend the moderating factors of accuracy in personality judgments.

Understand the legal capacity required to enter into contracts.

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Definitions:

Collective Behaviour

Actions and norms created through a group coming together, often spontaneously, without official organization.

Cutting Edge Sources

The most current and innovative resources or information available in a particular field.

Nonmaterial

Pertaining to aspects of a culture or society that are not physical or tangible, such as beliefs, values, rules, and norms.

Social Change

The alteration over time in societal structures and cultural norms and values, which can result from collective human actions, policies, or natural events.