The Ability of Diversification to Reduce Risk

question 74

Multiple Choice

The ability of diversification to reduce risk

• A) is greater the more negatively correlated the two events are.
• B) is greater the more positively correlated the two events are.
• C) is greater the more uncorrelated the two events are.
• D) is greater the more risk averse the individual is.

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Definitions:

Consumer Protection Law

Consumer protection law consists of regulations and statutes designed to ensure fair competition and the free flow of truthful information in the marketplace, protecting consumers from fraud and unfair business practices.

Deceptive Statements

False or misleading claims made intentionally to deceive or mislead someone.

Deceptive Advertisement

Marketing communication that misleads consumers about the characteristics, benefits, or quality of a product or service.

Consumer Law

A branch of law that deals with the rights of consumers and the regulation of trade practices to protect those rights.