If an Investor Does Not Diversify His Portfolio and Instead

question 58

Multiple Choice

If an investor does not diversify his portfolio and instead puts all of his money in one stock, the appropriate measure of security risk for that investor is the ________.

• A) stock's standard deviation
• B) variance of the market
• C) stock's beta
• D) covariance with the market index

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Definitions:

Transactional Leadership

A leadership style that focuses on supervision, organization, and performance; transactional leaders guide or motivate their followers in the direction of established goals by clarifying role and task requirements.

Transformational Leadership

A leadership style characterized by the ability to inspire and motivate followers to achieve exceptional outcomes and foster significant change.

Fiedler's Three Variables

Core components in Fiedler's contingency model, which posits that effective leadership depends on the match between a leader's style and the favorableness of the leadership situation.

Situation Favorable

Circumstances or conditions that are advantageous or beneficial for a particular purpose or outcome.