Which of the Following Portfolios Might Be Expected to Exhibit

question 32

Multiple Choice

Which of the following portfolios might be expected to exhibit less unique risk?

• A)Five different stocks; portfolio Beta = .8
• B)Three different stocks; portfolio Beta = 1.2
• C)Ten different stocks; portfolio Beta = 1.0
• D)Twelve different stocks; portfolio Beta unknown

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Definitions:

Ending Inventory

The final value of goods available for sale at the end of an accounting period.

Net Income

The amount of earnings left over after all expenses, including taxes and costs, have been deducted from total revenue; essentially, the company's profit.

Physical Count

An actual count of merchandise or inventory on hand, often conducted at the end of an accounting period to verify the accuracy of records.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.