Which of the Following Statements Is True

question 11

Multiple Choice

Which of the following statements is true?

• A)In a well-diversified portfolio, unsystematic risk can be largely diversified away, leaving behind systematic risk.
• B)In a well-diversified portfolio, systematic risk can be largely diversified away, leaving behind unsystematic risk.
• C)In a well-diversified portfolio, both systematic and unsystematic risk can be largely diversified away.
• D)No matter how well diversified a portfolio is, unsystematic and systematic risk always exist.

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Definitions:

Framing

The way information is presented to the public, which can influence perception and understanding.

Issue

A point or matter of discussion, debate, or dispute, often requiring resolution or consideration.

Wording

The choice and use of words in speech or writing, impacting communication effectiveness and interpretation.

Extrinsic Motivation

The desire to perform a behavior to receive promised rewards or avoid threatened punishment.