A Diversified Portfolio Should Be Less Risky Than Putting Your

question 169

True/False

A diversified portfolio should be less risky than putting your money into a single security.

Understand the conditions under which a buyer can revoke acceptance of goods.

Recognize the ability of parties in a sales contract to limit or exclude certain damages.

Identify the implications of not specifying a place of delivery in a sales contract.

Comprehend the obligations of a seller under the United Nations Convention on Contracts for the International Sale of Goods.

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Definitions:

Business Risk

The potential for loss or failure in a business operation due to factors like market conditions, financial instability, or operational challenges.

Financial Risk

The possibility of losing money on an investment or business venture, including market risk, credit risk, liquidity risk, and operational risk.

Variable Cost Ratio

This is a financial metric that represents the variable costs incurred as a percentage of sales, showing how much of each sales dollar is eaten by variable costs.

Degree of Total Leverage

The degree of total leverage measures the sensitivity of a company's net income to a change in sales, combining both operating and financial leverage effects.