Based on the Research Evidence, Related Diversification Appears to Be

question 79

True/False

Based on the research evidence, related diversification appears to be a better strategy for portfolio management than unrelated diversification.

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Definitions:

APC

In economics, it stands for Average Propensity to Consume, indicating the fraction of income that is spent.

Disposable Income

Resources households have at their disposal for saving and expenditure once income taxes have been accounted for.

Marginal Propensity

Typically refers to the marginal propensity to consume (MPC), which is the proportion of an additional income that a consumer spends on goods and services as opposed to saving it.

Disposable Income

The income available for saving and spending after the deduction of income taxes from earnings is known as disposable income.