Which of the Following Securities Will Provide the Greatest Diversification

question 20

Multiple Choice

Which of the following securities will provide the greatest diversification benefit for your portfolio?

• A)Security 4
• B)Security 2
• C)Security 3
• D)Security 1

---

Definitions:

Stated Value

A value that is assigned to a share of stock by the issuing company, which may bear no relation to its market value.

Par Value

Par value is the nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

No-Par Common Stock

Shares issued without a par value, meaning their value is determined by the market rather than a set face value.

Stated Value

The nominal value assigned by the company to its no-par stock, which becomes the legal capital per share.