The Relevant Risk of Any Individual Security Is Not Total

question 19

True/False

The relevant risk of any individual security is not total variability in returns but rather systematic variability, which is that portion of total variability that cannot be eliminated by combining it with other securities in a diversified portfolio.

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Definitions:

Contracting Disease

Refers to the process of becoming infected with a disease, often used in contexts involving the spread of infectious diseases.

Probability

Probability is a branch of mathematics that deals with the likelihood of events occurring, measured on a scale from 0 (impossible) to 1 (certain).

Expected Number

The statistical mean or average of a random variable, indicating its central or typical value in a probability distribution.

Bull's-Eye

The center of a target, often used metaphorically to indicate a precise or ideal goal.