As the Number of Individual Stocks in a Portfolio Increases

question 58

Multiple Choice

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

• A)increases at a constant rate.
• B)remains unchanged.
• C)decreases at a constant rate.
• D)decreases at a diminishing rate.
• E)decreases at an increasing rate.

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Definitions:

Vesting Period

The time period during which an employee earns rights to employer-contributed benefits, such as retirement fund contributions or stock options.

Share Options

Rights given by a company to its employees or directors to buy shares at a fixed price, usually after a specified period.

Vesting Date

The specified time at which an employee gains full control over the shares or stock options granted to them as part of their compensation package.