Diversification Is Investing in a Variety of Assets with Which

question 14

Multiple Choice

Diversification is investing in a variety of assets with which one of the following as the primary goal?

• A) increasing returns
• B) minimizing taxes
• C) reducing some risks
• D) eliminating all risks
• E) increasing the variance

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Definitions:

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with its most liquid assets without having to sell inventory.

Financial Data

Quantitative information about financial conditions, transactions, and performance of a person, company, or entity.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services sold on credit.

Days

Units of time consisting of 24 hours, often used to specify timeframes or durations.