Which of the Following Statements Is CORRECT

question 5

Multiple Choice

Which of the following statements is CORRECT?

• A) An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks.
• B) The higher the correlation between the stocks in a portfolio,the lower the risk inherent in the portfolio.
• C) It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock.
• D) Once a portfolio has about 40 stocks,adding additional stocks will not reduce its risk by even a small amount.
• E) An investor can eliminate virtually all diversifiable risk if he or she holds a very large,well-diversified portfolio of stocks.

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Definitions:

General Lineage Species Concept

The general lineage species concept is the idea that species are metapopulations of organisms that exchange alleles frequently enough that they constitute the same gene pool and therefore the same evolutionary lineage.

Biological

Pertaining to the science of life and living organisms, including their structure, function, growth, origin, evolution, and distribution.

Asexually

Reproduction without the fusion of gametes, leading to offspring genetically identical to the parent.

Archaea

A category of single-celled organisms, distinct in genetics from both bacteria and eukaryotes, frequently located in environments of extreme conditions.