Diversification Can Eliminate

question 79

Multiple Choice

Diversification can eliminate:

• A)All risk in a portfolio
• B)Risk only if the investor is risk averse
• C)The systematic risk in a portfolio
• D)The idiosyncratic risk in a portfolio

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Definitions:

First Impressions

Initial judgments and perceptions formed about an individual upon meeting, which significantly influence future interactions.

Asch

Refers to Solomon Asch, a psychologist known for conducting experiments on conformity, demonstrating how social pressure can influence individual judgment.

Cognition

The cognitive activity of gaining information and comprehension via thinking, experiencing, and sensory perception.

Thought

The mental process of considering, reasoning, or remembering; encompasses all aspects of conscious intellect and reflection.