Diversification Decreases the Variability of Both Specific and Market Risk

question 84

True/False

Diversification decreases the variability of both specific and market risk.

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Definitions:

Monetary Policy

Economic policy laid down by the central bank involving management of money supply and interest rates to influence economic growth and stability.

Federal Reserve System

Central bank of the United States, whose main job is to control our rate of monetary growth.

Money Supply

The total amount of monetary assets available in an economy at any specific time.

Depository Institutions Deregulation

The process of removing government restrictions on banks and other financial institutions, aimed at increasing competition and efficiency in the financial sector.