________ Will Not Systematically Affect the Portfolio Return, but It

question 15

Multiple Choice

________ will not systematically affect the portfolio return, but it will reduce the variability (standard deviation) of return with this variability reduced when there is ________ among security returns.

• A) Diversification; more variance
• B) Differentiation; less correlation
• C) Diversification; less correlation
• D) Diversification; less variance

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Definitions:

Resources

Assets, materials, or inputs used by organizations to produce goods or services.

Transportation Service

The offering of movement of goods or individuals from one location to another.

Cost of Lost Sales

The financial impact experienced by a business when potential sales are not realized due to stockouts or inability to meet demand.

Form Utility

The value added to goods through a manufacturing process that changes the form of the product to make it more desirable to consumers.