Because of Portfolio Effect,the Most Significant Factor Related to the Risk

question 11

Multiple Choice

Because of portfolio effect,the most significant factor related to the risk of any investment is

• A)Its standard deviation,or degree of uncertainty
• B)Its effect on the risk of the portfolio
• C)Systematic risk associated with the investment
• D)None of the above

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Definitions:

Fair Value

The asset's selling rate or the price required to manage a liability in a procedural transaction between participants in the market during the specified measurement interval.

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights and dividend receiving potential.

Par Value

The face value of a bond or stock as stated by the issuing company, which is not indicative of its market value.

Consideration Transferred

The total amount of assets, liabilities, or equity given by an acquiring firm to obtain control of an acquired firm during a merger or acquisition.