Which of the Following Statements Is FALSE

question 53

Multiple Choice

Which of the following statements is FALSE?

• A)The risk premium of a security is determined by its systematic risk and does not depend on its diversifiable risk.
• B)When we combine many stocks in a large portfolio,the firm-specific risks for each stock will average out and be diversified.
• C)Fluctuations of a stock's returns that are due to firm-specific news are common risks.
• D)The volatility in a large portfolio will decline until only the systematic risk remains.

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Definitions:

Rectifier

A device that transforms alternating current (AC) into direct current (DC), commonly utilized in systems supplying power.

AC Leakage Test

An AC Leakage Test measures the amount of alternating current (AC) leaking through the insulation of an electrical device to ensure safety and functionality.

DMM

An acronym for Digital Multimeter, a tool used to measure electrical properties such as voltage, current, and resistance.