As the Number of Stocks in a Portfolio Increases, the Portfolio

question 85

Multiple Choice

As the number of stocks in a portfolio increases, the portfolio standard deviation

• A) Increases at a diminishing rate
• B) Increases at an increasing rate
• C) Decreases at a diminishing rate
• D) Remains unchanged
• E) Decreases at an increasing rate

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Definitions:

Observable Events

Phenomena or occurrences that can be seen or measured directly by an observer.

Learning

A relatively permanent change in behavior (or behavioral potential) due to experience.

Conditioned Stimulus

A previously neutral stimulus that, after being paired with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that unconditionally—naturally and automatically—triggers a response without prior conditioning.