Diversification Reduces the Risk of a Portfolio Because ________ and Some

question 41

Multiple Choice

Diversification reduces the risk of a portfolio because ________ and some of the risks are averaged out of the portfolio.

• A)stocks do not move identically
• B)stocks have common risks
• C)stocks are unpredictable
• D)stocks are always affected by the market
• E)some stocks have lower returns than others

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Definitions:

Main

The most important or central part of something.

Culture-In-Context

Understanding cultural elements and their influences within specific situations or environments.

Global Negotiation

The process of discussing terms to reach a mutually acceptable agreement between parties from different countries or cultural backgrounds.

Culture

The shared values, norms, traditions, and practices that characterize a group of people or society.