As the Number of Stocks in a Portfolio Is Increased

question 13

Multiple Choice

As the number of stocks in a portfolio is increased,

• A)unique risk decreases and approaches zero.
• B)market risk decreases.
• C)unique risk decreases and becomes equal to market risk.
• D)total risk approaches zero.

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Definitions:

Ages

The duration for which an individual or object has been in existence.

Ice Cream Shop

A retail establishment that sells ice cream, gelato, sorbet, and/or frozen yogurt to consumers.

Weight

A measure of the force exerted by gravity on an object, commonly measured in units such as pounds or kilograms.

Distribution

In statistics, the way in which data points are spread or distributed across a range of values.