Which Statement Is FALSE Regarding Risk and Return

question 41

Multiple Choice

Which statement is FALSE regarding risk and return?

• A) For broad asset classes,the relationship between risk and return is nearly linear.
• B) Adding multiple stocks to a portfolio can reduce non-systematic risk.
• C) There is a nearly linear relationship between risk and return for individual stocks.
• D) Because investors can easily eliminate risk through diversification,investors should only be rewarded for non-diversifiable risk.

---

Definitions:

Interpreting Information

The process of understanding, analyzing, and making sense of data, symbols, or situations to form meaningful conclusions.

Critical Thinking

The ability to analyze facts to form a judgment. It includes the evaluation of sources, such as data, facts, observable phenomena, and research findings.

Brain Imaging Tools

Technologies, such as MRI and CT scans, used to visualize the structure and function of the brain.

Improved Scanning

An enhanced method or strategy of visually or systematically examining information to identify key components more effectively.