A Well-Diversified Portfolio Is Defined as

question 42

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.

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Definitions:

John Watson

An American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior over the study of the mind.

Ivan Pavlov

A Russian physiologist known for his work in classical conditioning, particularly for his experiments with dogs and the concept of the conditioned reflex.

Sigmund Freud

An Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Reciprocal Determinism

A concept in psychology proposing that an individual's behavior is both influenced by and influences their personal factors and the environment.