Which of the Following Statements Is Most Correct

question 31

Multiple Choice

Which of the following statements is most correct?

• A)Business-specific risk cannot be eliminated by diversification.
• B)Investors are not compensated for bearing business specific risk.
• C)Risk that cannot be diversified away is the risk peculiar to the stock under consideration.
• D)You cannot ignore the business-specific risk even if you hold a very large portfolio.
• E)All of the above statements are correct.

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Definitions:

Material Resources

Physical or tangible assets that can be used to produce goods and services, including natural resources, buildings, machinery, and tools.

Laissez-faire Leadership

A leadership style characterized by minimal intervention in the affairs of others, allowing people to act according to their own preferences.

Subordinates

Individuals or groups who are lower in rank, position, or authority within a hierarchy.

Direction

Can refer to guidance or supervision towards achieving a goal or to the specific path that something or someone moves or is aimed toward.