Which of the Following Is a True Statement About Diversification

question 62

Multiple Choice

Which of the following is a true statement about diversification?

• A) It will increase your overall risk.
• B) It will increase your volatility.
• C) It will decrease the number of investments in your portfolio.
• D) It will increase your chances of obtaining your financial goals.

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Definitions:

Transposition

An error in which the order of the digits is changed, such as writing $542 as $452 or $524.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check for errors in the double-entry system.

Journal Entries

The record of financial transactions in an accounting system, used to transfer information to the ledger, showing detailed information regarding date, accounts affected, and amounts.

Posted Correctly

The action of accurately recording transactions in the appropriate accounts in an accounting system.