Non-Diversifiable Risk

question 87

Multiple Choice

Non-diversifiable risk:

• A)can be cut almost in half by investing in 10 stocks provided each stock is in a different industry.
• B)can almost be eliminated by investing in 35 diverse securities.
• C)remains constant regardless of the number of securities held in a portfolio.
• D)has little, if any, impact on the actual realized returns for a diversified portfolio.
• E)should be ignored by investors.

---

Definitions:

Retail Method

A pricing and inventory assessment strategy used by retailers to calculate the value of inventory based on the retail price, adjusted for markdowns, returns, and discounts.

Ending Inventory

The total value of goods available for sale at the end of a specific accounting period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs.