As We Increase the Number of Stocks in a Portfolio

question 58

Multiple Choice

As we increase the number of stocks in a portfolio, the standard deviation of returns of the portfolio ________.

• A) increases
• B) remains unchanged
• C) decreases
• D) doubles

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Definitions:

Competitive Intelligence

The gathering and analysis ofinformation about competitors, market trends, and the business environment to support strategic decision making.

Distributors

Entities involved in the process of making products available for consumption by distributing them from manufacturers to the final point of sale.

Suppliers

Suppliers are entities that provide goods or services to another company, playing a crucial role in the supply chain by affecting the quality and availability of products offered.

Predictive Modeling

The use of statistical techniques to create models that predict future events or behaviors based on historical data.