Which One of the Following Concerns Is Likely to Be

question 14

Multiple Choice

Which one of the following concerns is likely to be most important to portfolio investors seeking diversification?

• A) Total volatility of individual securities
• B) Standard deviation of individual securities
• C) Correlation of returns between securities
• D) Achieving the risk-free rate of return

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Definitions:

Acquisition Date

The specific date on which one company gains control over another, marking the point from which the acquiree's financial performance starts being included in the acquirer's financial statements.

Consideration

The value, typically expressed in monetary terms, given in exchange for goods, services, or for entering into a contract.

Control

The power to direct the financial and operating policies of an entity with a view to gaining economic benefits from its activities.

Unconditional Contract

An agreement whose execution does not depend on fulfilling any conditions; it is binding upon the parties as soon as it is signed.