If an Investor Wishes to Better Diversify Her Investment Portfolio,which

question 11

True/False

If an investor wishes to better diversify her investment portfolio,which consists of the common stocks of many of the firms that are in the Dow Jones Industrial Average,she probably should invest in some companies that are in those industries that are classified as cyclical.

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Definitions:

Time-series Analysis

A statistical technique that analyzes a series of data points, usually collected at consistent intervals, to identify trends, cycles, or seasonal variations.

Trend Income Statements

Financial statements that show the progression of key income statement figures over a series of periods, allowing for trend analysis.

Sales

The revenues earned from selling goods or services over a period of time.

Preferred Stock Dividends

Dividends paid on preferred shares of a company which typically have a fixed dividend rate and priority over common stock in dividend payments.