The Process of Eliminating Systematic Risk Through the Purchase of a Number

question 29

Multiple Choice

The process of eliminating systematic risk through the purchase of a number of assets is called:

• A) Portfolio reduction.
• B) The systematic risk principle.
• C) The beta principle.
• D) The risk-reward slope.
• E) Portfolio diversification.

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Definitions:

Pessimists

Individuals who generally expect negative outcomes or focus on the worst aspects of situations.

Learned Helplessness

A condition where a person suffers from a sense of powerlessness, arising from traumatic events or persistent failure to succeed.

Depression

An emotional wellness issue where an individual experiences constant feelings of sadness or has a diminished interest in activities, significantly affecting their daily living.

Seligman

A psychologist known for his work in positive psychology and the theory of learned helplessness.