Which of the Following Statements About Diversification Is Most Accurate?The

question 39

Multiple Choice

Which of the following statements about diversification is most accurate?The purpose of diversification is to:

• A)increase a portfolio's expected return.
• B)reduce a portfolio's non-diversifiable risk.
• C)reduce a portfolio's systematic risk.
• D)reduce a portfolio's total risk.

---

Definitions:

Social Identity Theory

A psychological theory proposing that people categorize themselves in social groups, which influences their behaviors and attitudes towards in-group and out-group members.

Social Categorization

The cognitive process by which individuals classify others into groups based on shared characteristics or traits, contributing to identity formation and group perception.

Intergroup Conflict

A tension or clash arising from groups with differing goals, values, or interests.

Misperceptions

Incorrect or mistaken interpretations of situations, actions, or intentions.