A Well-Diversified Portfolio Is Defined as

question 82

Multiple Choice

A well-diversified portfolio is defined as

• A) one that is diversified over a large enough number of securities that the nonsystematic variance is essentially zero.
• B) one that contains securities from at least three different industry sectors.
• C) a portfolio whose factor beta equals 1.0.
• D) a portfolio that is equally weighted.
• E) all of these.

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Definitions:

Operating Activities

These involve the core day-to-day functions and transactions of a business that are directly related to its primary operations, typically reflected in the cash flows from operating activities section of the cash flow statement.

Gain on Sale

The financial profit obtained from selling an asset for more than its purchase price or book value.

Bonds Payable

Long-term liabilities on a company's balance sheet, representing money owed to bondholders that must be repaid at a future date.