We Would Almost Always Find That the Beta of a Diversified

question 64

True/False

We would almost always find that the beta of a diversified portfolio is less stable over time than the beta of a single security.

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Definitions:

Other Revenue

Revenue from sources other than the primary operating activity of a business.

Subsidiary Company

The corporation that is controlled by a parent company.

Controlling Company

A business entity that holds a significant amount of voting stock in another company, giving it control over its operations and policies.

Loss on Sale

The financial loss incurred from selling an asset for less than its carrying amount on the books.