As We Add More Uncorrelated Shares to a Portfolio Where

question 12

Multiple Choice

As we add more uncorrelated shares to a portfolio where the shares are held in equal weights, the benefit of diversification is most dramatic:

• A)after 20 shares have been added.
• B)when there are more than 500 shares.
• C)at the outset.
• D)when there are more than 1 000 shares.

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Definitions:

Stackable Discounts

The ability to apply multiple discounts in succession to an initial price, cumulatively reducing the final cost.

Maximin Strategy

A decision rule used in game theory and decision theory for minimizing the possible loss for a worst-case (maximum loss) scenario.

Nash Equilibrium

A situation in game theory where each player's strategy is optimal given the strategies of other players.

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while the other players keep theirs unchanged.