Under What Condition Will Adding a Security with a High

question 32

Essay

Under what condition will adding a security with a high standard deviation decrease the risk of a portfolio?

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Definitions:

Stakeholder Theory

A theory in corporate governance and business ethics that addresses the morals and values in managing an organization, emphasizing the importance of all stakeholders.

Corporate Social Responsibility

A business model that helps a company be socially accountable to itself, its stakeholders, and the public by practicing ethical and sustainable ways in operations and decision-making.

Rights Theory

A framework focusing on the entitlements individuals have, based on moral or legal principles, which should not be infringed upon by others.

Costs And Benefits

An analysis or assessment comparing the negatives and positives of a decision, project, or proposal.