Which of the Following Statements Is TRUE

question 56

Multiple Choice

Which of the following statements is TRUE?
I.Diversification is a process of removing systematic risk from a portfolio.
II.Diversification is a process of maximizing possible returns of a portfolio.

• A) Only I is true.
• B) Only II is true.
• C) Both I and II are true.
• D) Neither I nor II are true.

---

Definitions:

Pure Competition

Pure competition is a market structure characterized by a large number of small firms, a homogeneous product, free entry and exit from the market, and perfect information, leading to firms being price takers.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market segment.

Advertising

The business or task of developing advertising content for commercial offerings.

Pure Competition

A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to minimal profit for the firms.