A Technique That Can Be Employed to Make a Portfolio

question 215

Multiple Choice

A technique that can be employed to make a portfolio less risky than any of its individual securities is

• A)plowback.
• B)diversification.
• C)programmed trading.
• D)speculation.

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Definitions:

Contractual Agreement

A legally binding contract specifying the terms and conditions under which parties agree to perform certain actions.

Note Principal

The original amount of money borrowed or the amount still owed on a loan, separate from interest.

Interest Expense

The cost incurred by an entity for borrowed funds, often expressed as a percentage of the principal.

Straight-line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful lifespan.