Which of the Following Statements Is Correct

question 129

Multiple Choice

Which of the following statements is correct?

• A)A stock's beta is less relevant as a measure of risk to an investor with a well-diversified portfolio than to an investor who holds only that one stock.
• B)If an investor buys enough stocks, he or she can, through diversification, eliminate all of the diversifiable risk inherent in owning stocks. Therefore, if a portfolio contained all publicly traded stocks, it would be essentially riskless.
• C)Portfolio diversification reduces the variability of returns (as measured by the standard deviation) of each individual stock held in a portfolio.
• D)A security's beta measures its nondiversifiable, or market, risk relative to that of an average stock.

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Definitions:

Cyberspace

A virtual environment comprised of networked computers and digital platforms where users interact, share information, and conduct transactions.

Negligence Per Se

An action or failure to act in violation of a statutory requirement.

Statutory Requirement

A statutory requirement is a mandated provision set forth by legislation that must be adhered to.

Comparative Negligence

A legal doctrine that allocates damages based on the degree of fault of each party involved in an incident where both parties are partially to blame.