How Many Diverse Securities Are Required to Eliminate the Majority

question 68

Multiple Choice

How many diverse securities are required to eliminate the majority of the diversifiable risk from a portfolio?

• A)5
• B)10
• C)25
• D)50
• E)75

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Definitions:

Comparability

Ability to compare the accounting information of different companies because they use the same accounting principles.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

FIFO Costing Assumption

An inventory valuation method that assumes the items purchased or produced first are sold first, thereby calculating the costs based on earliest prices.

Income Taxes

Taxes levied by governments on the income generated by individuals or businesses.