Which One of the Following Statements Is True

question 30

Multiple Choice

Which one of the following statements is true?

• A)A well-diversified portfolio has negligible systematic risk.
• B)A well-diversified portfolio has negligible unsystematic risk.
• C)An individual security has negligible systematic risk.
• D)An individual security has negligible unsystematic risk.
• E)Both a well-diversified portfolio and an individual security have negligible unsystematic risk.

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Definitions:

Trends

Patterns or directions identified over periods of time in data sets or within a series of data points.

Multiple Regression

A statistical technique that models the relationship between a dependent variable and multiple independent variables to understand the impact of each on the dependent variable.

Predict the Value

The process of using information from existing data or a statistical model to estimate or forecast the value of an unknown variable.

ANOVA

Analysis of Variance, a statistical method used to compare the means of three or more samples to see if at least one is significantly different from the others.