The Risk Associated with a Portfolio

question 26

Multiple Choice

The risk associated with a portfolio

• A) declines exponentially as the number of stocks purchased increases and continues to decline until a point of zero risk is reached.
• B) decreases as the investor increases the number of stocks in her portfolio.
• C) grows exponentially with the number of stocks purchased.
• D) increases as the investor increases the number of stocks in her portfolio.

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Definitions:

Statement Of Cash Flows

A financial report that provides a summary of a company's cash inflows and outflows over a specified period, showing how well it manages its cash position.

Operating Segment

A component of a company that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is available.

Reportable Segment

A component of an enterprise that is distinguished by business activities, geographical areas, or products and services, requiring separate financial disclosure under accounting standards.

Revenue

The total income generated by a company from its normal business operations, before any expenses are deducted.