The Amount of a Stock's Risk That Is Diversified Away

question 83

Multiple Choice

The amount of a stock's risk that is diversified away ________.

• A) is independent of the portfolio that you add it to
• B) depends on market risk premium
• C) depends on risk-free rate of interest
• D) depends on the portfolio that you add it to

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Definitions:

Missouri

A U.S. state located in the Midwestern region, known for its diverse geography, ranging from the Ozark Mountains to the Mississippi River.

Statehood

The condition of being recognized as an independent nation or the admission of a territory into a federation or union as a state.

Slavery

A system in which individuals are owned by others, denied freedom, and forced to work without compensation.

Balance of Power

is a diplomatic theory aiming to prevent any one nation or alliance from becoming too strong by maintaining equally distributed military and economic power among countries or groups of countries.