Which of the Following Statements Is CORRECTσ

question 133

Multiple Choice

Which of the following statements is CORRECTσ

• A) the higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio.
• B) an investor can eliminate almost all risk if he or she holds a very large and well diversified portfolio of stocks.
• C) once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
• D) an investor can eliminate almost all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
• E) an investor can eliminate almost all market risk if he or she holds a very large and well diversified portfolio of stocks.

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Definitions:

Humanistic Theory

A psychological perspective which emphasizes individual potential and stresses the importance of growth and self-actualization.

Gender Schema Theory

A cognitive theory that posits gender as a fundamental way in which individuals organize information about themselves and the world, influencing perception, behavior, and attitudes based on societal norms.

Observational Learning Theory

Suggests that people can learn new behaviors and information by watching others, also known as social learning theory.

Gender Typing

The acquisition of a traditional gender role; encompasses the societal and psychological traits linked to one's gender.