Diversifying a Portfolio Across Various Sectors and Industries Might Do

question 33

Multiple Choice

Diversifying a portfolio across various sectors and industries might do more than one of the following.However,this diversification must do which one of the following?

• A)reduce the portfolio's systematic risk level
• B)reduce the beta of the portfolio to zero
• C)increase the security's risk premium
• D)increase the expected risk premium
• E)reduce the portfolio's unique risks

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Definitions:

Variables

Represent characteristics or quantities that can change and have different values for different individuals or objects in a study.

Nonlinear Relationship

Relationship between variables not appropriately represented by a straight line.

Faculty Members

Individuals who teach courses or are involved in academic research at a college or university.

Classes

In the context of data, refers to categories or groupings into which data points are sorted; in education, refers to courses of instruction.