____________________ Variation Is Caused by a Number of Randomly Occurring

question 54

Short Answer

____________________ variation is caused by a number of randomly occurring events that are part of the production process.

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Definitions:

Nonsystematic Variance

The portion of a security's variance that is unique to the specific security and can be mitigated through diversification.

Market Index

An aggregate value produced by combining several stocks or other investment vehicles together and expressing their total values against a base value from a specific date.

Active Portfolio

An active portfolio refers to a collection of investments that are managed and regularly adjusted by portfolio managers in an attempt to outperform the market.