A Stock Investor Owns a Diversified Portfolio of 15 Stocks

question 98

Multiple Choice

A stock investor owns a diversified portfolio of 15 stocks.What will be the likely effect on portfolio standard deviation from adding one more stock?

• A)a slight increase will occur.
• B)a large increase will occur.
• C)a slight decrease will occur.
• D)a large decrease will occur.

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Definitions:

Civil Liberties

Fundamental rights and freedoms protected from infringement by the government, such as free speech and privacy.

Communists

Refers to individuals who support or are members of a political ideology advocating for a classless society, primarily based on the theories of Karl Marx and Friedrich Engels.

New Coalition

A political or strategic agreement for cooperation among different political parties, factions, or interest groups.

Congress

The legislative branch of the United States federal government, consisting of two houses: the Senate and the House of Representatives.