The Primary Purpose of Portfolio Diversification Is To

question 91

Multiple Choice

The primary purpose of portfolio diversification is to:

• A) increase returns and risks.
• B) eliminate all risks.
• C) eliminate asset-specific risk.
• D) eliminate systematic risk.
• E) lower both returns and risks.

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Definitions:

Nonsmoker

A person who does not smoke cigarettes, cigars, or any other tobacco products.

Null Hypothesis

A statement used in statistics that proposes there is no significant difference or effect, serving as the default or initial presumption to be tested.

One-way ANOVA

A statistical test that evaluates the differences between the means of three or more independent groups on a single factor.

High Incomes

Earnings that are substantially above the average or median level compared to a specific reference group or geographic area.