The Principle of Diversification Tells Us That

question 15

Multiple Choice

The principle of diversification tells us that:

• A)there is no risk in investing in a portfolio of shares
• B)spreading your investment across many assets will eliminate some risk
• C)all risk can be eliminated
• D)unsystematic risk cannot be reduced
• E)systematic risk can always be eliminated by diversification

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Definitions:

Vertical Integration

Strategy of integrating the upstream part of the supply chain with the internal part, typically by purchasing upstream suppliers, so as to ensure timely availability of supplies.

Orders

Instructions or requests for someone to do something or for products, often in the context of business or military.

SCM

The coordination and supervision of materials, finances, and information as they progress from the supplier, through manufacturing and distribution channels, to finally reach the consumer is referred to as Supply Chain Management.

Receive Payments

The process of collecting money or financial compensation for goods provided, services rendered, or as a settlement of obligations.