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:

WiMAX

Worldwide Interoperability for Microwave Access, a wireless communication standard designed to provide high-speed broadband access over long distances.

Wide-area

A term typically used in networking to describe a network that covers a large geographic area, such as a city, country, or even intercontinental distances, often referred to as a WAN (Wide Area Network).

Wireless Network

A computer network that uses wireless data connections between network nodes, enabling devices to connect to the internet without physical wires.

First Generation

Referring to the earliest stage or version of a product, technology, or system, often characterized by being the initial attempt or introductory iteration.