One of the Easiest Methods of Diversifying Away Firm-Specific Risks

question 28

Multiple Choice

One of the easiest methods of diversifying away firm-specific risks is to:

• A) buy only stocks with a beta of 1.0.
• B) build a portfolio with 40 to 55 individual stocks.
• C) purchase the shares of a mutual fund.
• D)purchase stocks that plot above the security market line.

---

Definitions:

Mail or Telephone Order Merchandise Rule

A Federal Trade Commission rule ensuring that companies ship orders made by mail, phone, or online in a timely manner, or provide timely notice of delays and offer the option of a refund.

Complete Package

Typically describes a product or offer that includes all necessary components or features as a single, comprehensive unit.

Federal Law

Legislation enacted by the national government of a country that applies to all of its citizens and entities.

Funeral Services

Professional services involved in organizing and managing a funeral, including embalming, burial, and memorial services.