An Increase in the Number of Corporations in a Portfolio

question 62

Multiple Choice

An increase in the number of corporations in a portfolio from 110 to 120 reduces

• A)market risk by more than an increase from 1 to 10.
• B)market risk by less than an increase from 1 to 10.
• C)firm-specific risk by more than an increase from 1 to 10.
• D)firm-specific risk by less than an increase from 1 to 10.

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Definitions:

Ethics Perspective

A viewpoint that focuses on the moral principles governing or influencing conduct, especially in a business context.

Procedural Justice

The perceived fairness of the processes used to make decisions, where individuals involved in a process view it as just if it meets ethical and legal standards.

Fairly Administered

Ensuring processes and decisions are conducted in a just, unbiased, and equitable manner.

Policies and Rules

Established guidelines and regulations designed to govern the conduct, procedures, and operations within an organization.