Which Statement Is FALSE Regarding Risk and Return

question 68

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.

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Definitions:

Bigamy

The act of marrying one person while still legally married to another, which is illegal in many jurisdictions.

Gay Marriage

The legal or socially recognized union of two people of the same sex.

Same Gender

Referring to individuals of the same sex or gender identity.

Sexual Access

Pertains to the ability or opportunity to engage in sexual activities or relationships.