Diversification Refers to the _____

question 57

Multiple Choice

Diversification refers to the _____. 

• A)reduction of the stand-alone risk of an individual investment, which is measured by its beta coefficient, by combining it with other investments in a portfolio
• B)reduction of the stand-alone risk of an individual investment, which is measured by the standard deviation of its returns, by combining it with other investments in a portfolio
• C)reduction of the systematic risk of an individual investment, which is measured by its beta coefficient, by combining it with other investments in a portfolio
• D)reduction of the systematic risk of an individual investment, which is measured by the standard deviation of its returns, by combining it with other investments in a portfolio
• E)reduction of the unsystematic risk of an individual investment, which is measured by its beta coefficient, by combining it with other investments in a portfolio

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Definitions:

Contract Price

The agreed upon sum of money that a buyer will pay to a seller in exchange for the fulfillment of a service or delivery of a good.

Express Condition

A clearly defined and articulated term or stipulation within a contract that must be met for the contract to be fulfilled.

Implied Condition

A term or condition in a contract not expressly stated but assumed to exist based on the nature of the agreement and the parties' intentions.

Constructive Condition

A condition inferred by law in contracts, implying that certain promises must be fulfilled before other corresponding duties are required.