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Ashlynn was listening to a tape recording of a famous speech that was being played backward.She just heard gibberish until a classmate said the phrase "meet me in St.Louis" was clearly spoken.The tape was rewound and as Ashlynn listened this time,she also clearly heard the same phrase.Ashlynn's ability to detect the phrase the second time through the tape illustrates
Diversification
An investment strategy that involves spreading investments among various financial instruments, industries, or other categories to minimize risk.
Diversifiable Risk
The risk that can be reduced or eliminated from a portfolio through diversification, as opposed to non-diversifiable risk.
Rational Investor
An individual who makes investment decisions based on logical analysis, aiming to maximize returns while minimizing risks.
Security Market Line
Represents the relationship between the risk of an investment and its expected return, illustrating the risk-return trade-off in capital market theory.
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