Which of the Following Is True Regarding Random Diversification

question 9

Multiple Choice

Which of the following is true regarding random diversification?

• A)Investment characteristics are considered important in random diversification.
• B)The net benefit of random diversification eventually disappears as more securities are added.
• C)Random diversification,if done correctly,can eliminate all risk in a portfolio.
• D)Random diversification eventually removes all company specific risk from a portfolio.

---

Definitions:

Job Burnout

A state of emotional, physical, and mental exhaustion caused by prolonged stress and frustration at work.

Chronic Stressors

Inescapable, day-to-day situations or conditions that cause stress.

Stress

A physical or emotional response to demands or pressures, which can stem from various aspects of life including work, relationships, or financial troubles.

Hans Selye

A Hungarian-Canadian endocrinologist known for his research on the response of organisms to stress.