The Primary Benefit of Diversification Is That It

question 76

Multiple Choice

The primary benefit of diversification is that it

• A) is convenient.
• B) is cheap.
• C) reduces the exposure of your investments to adverse effects of any individual investment.
• D) increases stock volatility.

---

Definitions:

P-Value

The probability of obtaining test results at least as extreme as the observed results, assuming that the null hypothesis is correct.

Hypotheses

Proposed explanations for a phenomenon, set forth as a starting point for further investigation or experimentation.

Normal Distribution

A bell-shaped distribution characterized by its mean and standard deviation, where the mean, median, and mode are all equal.

Normally Distributed

Refers to a distribution that follows the normal (bell-curve) shape, characterized by a symmetric shape around the mean, indicating random variables with equal mean, median, and mode.