If We Are Able to Eliminate All of the Unsystematic

question 88

Multiple Choice

If we are able to eliminate all of the unsystematic risk in a portfolio then,what is the result?

• A) a risk-free portfolio
• B) a portfolio that contains only systematic risk
• C) a portfolio that has an expected return of zero
• D) such a portfolio cannot be constructed since there will always be unsystematic risk in any portfolio

---

Definitions:

Accounts Receivable

The amount customers are required to pay to a company for already delivered services or products.

FOB Shipping Point

A term used in shipping agreements indicating the buyer is responsible for the goods and shipping costs as soon as they leave the seller's premises.

Perpetual System

An inventory accounting system that records inventory purchases and sales in real-time, providing a continuous record of inventory levels.

Freight Costs

Freight Costs entail the charges incurred for the transportation of goods by land, sea, or air.