Investors May Reduce Risk by Constructing Diversified Portfolios but Not

question 8

True/False

Investors may reduce risk by constructing diversified portfolios but not eliminate risk.

---

Definitions:

Operating Cash Inflow

Cash generated from a company's normal business operations.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making it the simplest depreciation method.

After-Tax Discount

The reduction in price or value of an item after taxes have been factored into its cost.

Income Tax Rate

The percentage of income that is paid to the government as tax. It can vary depending on the income level and jurisdiction.