The Primary Purpose of Portfolio Diversification Is to

question 52

Multiple Choice

The primary purpose of portfolio diversification is to

• A)increase returns and risks.
• B)eliminate all risks.
• C)eliminate asset-specific risk.
• D)lower both returns and risks.
• E)eliminate systematic risk.

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Definitions:

Realpolitik

A foreign policy strategy focused on practical and pragmatic considerations, often prioritizing national interest and power over moral or ideological considerations.

Bismarck's Politics

The political strategies employed by Otto von Bismarck, the first Chancellor of the German Empire, particularly his use of realpolitik and diplomacy to unify the German states under Prussian leadership.

Morality

Principles concerning the distinction between right and wrong behavior, guiding individual conduct and the essence of ethics.

French Emperor

A title historically associated with Napoleon Bonaparte, who ruled France first as First Consul from 1799 to 1804, and then as Emperor from 1804 to 1814 and again in 1815.