As Diversification Increases, the Firm-Specific Risk of a Portfolio Approaches

question 51

Multiple Choice

As diversification increases, the firm-specific risk of a portfolio approaches

• A) 0.
• B) 1.
• C) infinity.
• D) (n − 1) × n.

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Definitions:

Pleasurable

Describing an experience or sensation that is enjoyable and brings happiness or satisfaction.

Unipolar

Referring to mood disorders that involve only one emotional pole, such as depression, without episodes of mania.

Dissociative Identity Disorder

A severe form of dissociation, a mental process which produces a lack of connection in a person's thoughts, memory, and sense of identity, formerly known as multiple personality disorder.

Sexual Orientation

An enduring pattern of romantic or sexual attraction to persons of the opposite sex, same sex, both sexes, or more than one gender.