Using the Sharpe Single-Index Model with a Random Portfolio of U.S.common

question 12

Multiple Choice

Using the Sharpe single-index model with a random portfolio of U.S.common stocks,as one increases the number of stocks in the portfolio,the total risk of the portfolio will:

• A) approach zero.
• B) approach the portfolio's systematic risk.
• C) approach the portfolio's non-systematic risk.
• D) not be affected.

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Definitions:

Mourning Rituals

Culturally specific practices and ceremonies performed by individuals or communities after the death of someone to honor the deceased and express grief.

United States

A country in North America consisting of 50 states and a federal district, known for its diverse geography, culture, and as a leading global economic and military power.

Islam Tradition

The body of cultural practices and beliefs that have developed in the Islamic faith.

Widow

A woman who has lost her spouse by death and has not remarried.