If You Build a Large Enough Portfolio,you Can Diversify Away

question 84

Multiple Choice

If you build a large enough portfolio,you can diversify away all ________ risk,but you will be left with ________ risk.

• A)diversifiable,unsystematic
• B)unsystematic,systematic
• C)systematic,undiversifiable
• D)diversifiable,diversifiable

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Definitions:

Batch

A grouping of a number of items processed or produced together as a single lot.

Operating Characteristics Curve

A graphical representation that shows the relationship between the capability of a process and its performance with respect to different criteria.

Acceptance Sampling

A statistical quality control method that involves inspecting a random sample of items from a lot to determine if the entire lot should be accepted or rejected.