Even Though Diversification Can Reduce Risk,it Also Makes It More

question 33

True/False

Even though diversification can reduce risk,it also makes it more difficult to measure a project's or an asset's risk.

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Definitions:

Social Exchange Theory

A theory suggesting that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives.

Altruistic Behavior

Action taken to benefit others without expecting personal gains, driven by selfless concern for the well-being of others.

Reciprocity Norms

Social norms that dictate that we should treat others as they treat us, leading to mutual benefit or support.

Reciprocity Norm

A social expectation that people will respond to each other in kind, returning benefits for benefits and responding to harms with either retaliation or forgiveness.