Which of the Following Statements Is Correct with Regards to Diversification

question 64

Multiple Choice

Which of the following statements is correct with regards to diversification?

• A)Diversifying reduces the return of the portfolio.
• B)Diversifying reduces the market risk of the portfolio.
• C)Diversifying reduces the dollar return of the portfolio.
• D)None of these statements are correct.

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Definitions:

David McClelland

A psychologist known for his work on motivation theory, specifically related to the needs for achievement, power, and affiliation.

Distributive Justice

A concept in social psychology and ethics that concerns the fair allocation of resources among members of a community, focusing on outcomes that are perceived as equitable and just.

Ethical

Pertaining to or dealing with morals or the principles of morality; concerning right and wrong behavior.

Interpersonal Power

The ability of an individual to influence the behavior or attitudes of another individual in a social interaction.