Mutual Funds Reduce Unsystematic Risk but Not Systematic Risk

question 41

True/False

Mutual funds reduce unsystematic risk but not systematic risk.

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Definitions:

Regression Line

The line drawn based on values in a regression equation. Also known as a trend line.

Line Of Best Fit

The regression line that best fits the observed scores and minimizes the error in prediction.

Scatter Plot Line

Might refer to a trend line drawn through a scatter plot to show the direction of the relationship between two variables, although "Scatter Plot Line" is not a standard term.

Correlation

An index quantifying how much two or more variables move in conjunction with one another.