The Amount of a Stock's Risk That Is Diversified Away

question 83

Multiple Choice

The amount of a stock's risk that is diversified away ________.

• A) is independent of the portfolio that you add it to
• B) depends on market risk premium
• C) depends on risk-free rate of interest
• D) depends on the portfolio that you add it to

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Definitions:

Highly Desirable

Attributes or features of a product or service that make it particularly appealing and sought-after by consumers.

Ethical Compliance Program

A formal plan within an organization designed to prevent violations of law or company policies, often focusing on moral business practices and legal compliance.

Code Of Conduct

A set of rules outlining the social norms, responsibilities, and proper practices for an individual, party or organization.

Daily Decision Making

The process of making choices or judgements every day in both personal and professional contexts, often involving problem-solving and prioritization.