Portfolio a Has but One Security, While Portfolio B Has

question 8

True/False

Portfolio A has but one security, while Portfolio B has 100 securities.Because of diversification effects, we would expect Portfolio B to have the lower risk.However, it is possible for Portfolio A to be less risky.

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Definitions:

Purchases Budget

A financial plan that estimates the amount of goods a company needs to buy to meet its production and sales goals.

Organizational Process

The structured set of activities and tasks that an organization uses to coordinate work operations and achieve its objectives.