In Modern Portfolio Theory,an Investor Should Not Be Concerned with Unsystematic

question 62

Multiple Choice

In modern portfolio theory,an investor should not be concerned with unsystematic risk when calculating expected rates of return because:

• A) there is no way to measure unsystematic risk.
• B) unsystematic risks are assumed to be removed by diversification.
• C) unsystematic risks are generally insignificant.
• D) beta includes a portion to compensate for unsystematic risk.

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Definitions:

Women

Female human beings, representing one of the two primary biological categories of the human species based on reproductive anatomy and function.

Times More Likely

A statistical expression indicating the increased likelihood of an event or condition compared to another.

Mental Health Care

Professional medical and therapeutic services aimed at maintaining or improving mental health and treating mental illnesses.

Male Inmates

Individuals identified as male who are serving time in a prison or jail.