Diversification Can Effectively Reduce Risk

question 13

Multiple Choice

Diversification can effectively reduce risk.Once a portfolio is diversified, the type of risk remaining is:

• A)individual security risk.
• B)riskless security risk.
• C)risk related to the market portfolio.
• D)total standard deviations.
• E)None of the above.

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Definitions:

Unconditional Stimulus

A stimulus that elicits a natural, reflexive response without prior learning or conditioning.

Differentiation

The process of distinguishing or creating differences between objects, ideas, or aspects of experience, often to understand or categorize them more effectively.

Primary Circular Reactions

The repetitive actions that infants engage in to explore their bodies and the immediate environment, a concept introduced by Piaget within his stages of cognitive development.

Primary Indicates

Likely meant to be "Primary Indicators," which are main or core measures used to assess a condition or phenomenon.