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.

---

Definitions:

Sales

The transactions involving the exchange of goods or services for money, constituting the primary revenue source for most businesses.

Variable Manufacturing Costs

Costs that vary directly with the level of production output, such as raw materials and direct labor costs.

Fixed Manufacturing Costs

Overheads or expenses that do not change with the level of production, such as rent and salaries.

Costing Approach

A costing approach is a method or technique used to determine the cost of a product or service, which can include different methodologies like absorption costing or activity-based costing.