The Total Risk of a Well-Diversified Portfolio of U

question 69

Multiple Choice

The total risk of a well-diversified portfolio of U.S. stocks appears to be about what proportion of the risk of an average one-stock portfolio?

• A) one-third
• B) one-half
• C) two-thirds
• D) three-fourths

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Definitions:

Groundwater

Water that is stored underground in soil or between rocks, supplying wells and springs, and playing a crucial role in the hydrological cycle.

Landslide

A mass movement of rock, earth, or debris down a slope due to gravity.

Pressure

The force exerted by something against a surface, usually measured in units such as Pascal (Pa) or pounds per square inch (psi).

Basaltic Lava

A type of lava originating from the mantle, characteristically dark and rich in magnesium and iron, with low viscosity.