Non-Diversifiable Risk

question 28

Multiple Choice

Non-diversifiable risk:

• A) can be cut almost in half by simply investing in 10 stocks provided each stock is in a different industry.
• B) can almost be eliminated by investing in 35 diverse securities.
• C) remains constant regardless of the number of securities held in a portfolio.
• D) has little, if any, impact on the actual realized returns for a diversified portfolio.
• E) should be ignored by investors.

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Definitions:

Architecture Element

Fundamental components that are used in building design such as columns, beams, arches, roofs, and walls.

Skin and Bones Buildings

Architectural style characterized by the use of minimal structural framework visible through the exterior, emphasizing transparency and lightness.

Ludwig Mies van der Rohe

A pioneering modernist architect known for his minimalist design philosophy summed up by the phrase "less is more."

Less is More

A design principle emphasizing that simplicity and clarity lead to good design, often associated with the minimalist movement.