The Benefit of Diversification to an Investor Is the Reduction

question 27

Multiple Choice

The benefit of diversification to an investor is the reduction of:

• A)brokerage costs.
• B)brokerage costs and risk.
• C)risk.
• D)research time.

---

Definitions:

Market Price

The market's current rate for purchasing or selling an asset or service.

Subscription Price

The price at which existing shareholders are allowed to buy additional shares of a company, usually at a discount.

Initial Public Offering (IPO)

The process by which a private company offers shares of stock to the public for the first time to raise capital.

Underwriter

A professional or company that assesses and accepts the risk of another party, often used in insurance and securities issuing.