Bob Holds a Portfolio of 20 Stocks from Different Industries

question 26

Multiple Choice

Bob holds a portfolio of 20 stocks from different industries, whereas Sharon holds only one stock in her portfolio. Assuming they each add a stock to their portfolio, which of the following is most likely? Relative to Bob's portfolio, Sharon's portfolio will experience the:

• A) larger increase in total risk.
• B) larger increase in return.
• C) larger decrease in total risk.
• D) larger decrease in market risk.

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Definitions:

R or S

Notation used in chemistry to describe the absolute configuration of chiral centers in molecules, indicating the spatial arrangement of atoms.

Asymmetric Carbon Atoms

Carbon atoms bonded to four different groups, leading to chiral molecules that can exist as enantiomers.

Chiral

Describes an object, typically a molecule, that cannot be superimposed on its mirror image, illustrating handedness in its structure.

Optically Active

A substance is said to be optically active if it can rotate the plane of polarization of polarized light, a property often associated with the presence of chiral molecules.