Portfolio Diversification Eliminates Which One of the Following

question 36

Multiple Choice

Portfolio diversification eliminates which one of the following?

• A)Total investment risk
• B)Portfolio risk premium
• C)Market risk
• D)Unsystematic risk
• E)Reward for bearing risk

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Definitions:

Incentive Compensation

A form of payment designed to motivate and reward employees for exceeding their performance targets or objectives.

Agency Costs

Costs incurred from conflicts of interest among stakeholders, particularly between management (agents) and shareholders (principals).

Advertising

The process or career involved in creating promotional material for goods or services.

Time Clocks

Devices used by employers to record the number of hours worked by employees, ensuring accurate tracking of time for payroll purposes.