As the Number of Risky Assets in a Portfolio Increases

question 65

True/False

As the number of risky assets in a portfolio increases, the total risk of the portfolio decreases.

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Definitions:

Spot Oil Prices

The current market price at which oil can be bought or sold for immediate delivery.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government securities.

S&P Contract Multiplier

A factor used to determine the cash value of an S&P futures contract, which multiplies the value of the contract's underlying asset by a specific amount.

Fixed-Income Arbitrage

An investment strategy that seeks to exploit pricing differentials between related fixed income securities.