The Incremental Risk to a Portfolio from Adding Another Stock

question 35

Multiple Choice

The incremental risk to a portfolio from adding another stock:

• A) is always greater than the average portfolio risk.
• B) is always less than the average portfolio risk.
• C) is always positive.
• D) is often positive but can be negative.

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Definitions:

Spirochete

A long, flexible, helical bacterium. Compare with spirillum, vibrio, bacillus, and coccus.

Bacilli

Rod-shaped bacteria that are found in various environments, and can be either harmful or beneficial to humans and other organisms.

Vibrio

A spirillum (spiral-shaped bacterium) that is shaped like a comma. Compare with spirillum, spirochete, bacillus, and coccus.

Endospores

Resistant, dormant structures formed within some bacteria, enabling survival in harsh environmental conditions.