Which of the Following Statements Are Correct Concerning Diversifiable Risks

question 75

Multiple Choice

Which of the following statements are correct concerning diversifiable risks?
I.Diversifiable risks can be essentially eliminated by investing in thirty unrelated securities.
II.There is no reward for accepting diversifiable risks.
III.Diversifiable risks are generally associated with an individual firm or industry.
IV.Beta measures diversifiable risk.

• A)I and III only
• B)II and IV only
• C)I and IV only
• D)I, II and III only
• E)I, II, III, and IV

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Definitions:

Additive Effects

The cumulative impact of individual genes on a phenotype, where the total effect is the sum of the effects of each gene.

Dominance Effects

Phenomena where the phenotype of the heterozygote is closer to that of one of the homozygotes due to the dominant influence of one allele over another.

Epistatic Effects

Interactions between different gene loci where the effect of one gene is modified by the presence or absence of one or more 'modifier genes'.

Quantitative Trait

A measurable phenotype that depends on the cumulative actions of many genes and possibly environmental factors.