The Ability of an Economic Agent to Reduce Risk by Holding

question 22

Multiple Choice

The ability of an economic agent to reduce risk by holding a number of securities in a portfolio is called:

• A)asset management
• B)efficiency
• C)arbitrage
• D)diversification

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Definitions:

Fraud

A deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Trial Balance

A bookkeeping report that lists the balances in each general ledger account at a specific time, ensuring that debits equal credits.

Individual Accounts

Financial accounts that are owned by a single individual, as opposed to joint accounts owned by multiple parties.

Standard Account Forms

Preset document templates for financial transactions and accounts record-keeping.