Because Any Investor Can Create a Portfolio of Assets That

question 28

True/False

Because any investor can create a portfolio of assets that will eliminate all, or virtually all, nondiversifiable risk, the only relevant risk is diversifiable risk.

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Definitions:

Capital

Refers to the financial assets or resources that individuals, companies, or governments use to fund their operations and invest in their ventures.

Income

The money received, especially on a regular basis, for work or through investments.

Liability

A company's financial debt or obligations that arise during business operations, to be settled over time through the transfer of economic benefits.

Owner Contribution

Capital injected by the owners into the business, increasing equity.