Non-Diversifiable Risk

question 28

Multiple Choice

Non-diversifiable risk:

• A) can be cut almost in half by simply investing in 10 stocks provided each stock is in a different industry.
• B) can almost be eliminated by investing in 35 diverse securities.
• C) remains constant regardless of the number of securities held in a portfolio.
• D) has little, if any, impact on the actual realized returns for a diversified portfolio.
• E) should be ignored by investors.

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Definitions:

Money Claims

Money claims involve legal actions taken to recover debts or money owed from a person, company, or entity.

Entities

Organizations or businesses that exist as distinct legal, financial, and operational units for accounting purposes.

Receivables

Money owed to a company by its customers or other parties for goods or services that have been delivered but not yet paid for.

Older Accounts

Refers to accounts receivable that have been outstanding for a longer period, often categorized by how long they have been unpaid (e.g., 30 days, 60 days).