As We Add More Diverse Securities to a Portfolio,the ________

question 32

Multiple Choice

As we add more diverse securities to a portfolio,the ________ risks of the portfolio will decrease.

• A)total and systematic
• B)systematic and unsystematic
• C)total and unsystematic
• D)unsystematic
• E)systematic

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Definitions:

Production Possibilities Frontier

A chart that maps out all possible maximum production outcomes for a pair of items, given certain inputs which involve resources and more.

Interdependence

The mutual reliance between two or more entities, where the actions of one significantly affect the other, prevalent in global economies.

Gains From Trade

The benefits that parties obtain from engaging in voluntary trade, often resulting in an increase in overall economic efficiency and consumer welfare.

Gain From Trade

Refers to the increase in output and consumption that countries experience through specialization and exchange of goods and services.