Portfolio a Has but One Security, While Portfolio B Has

question 18

True/False

Portfolio A has but one security, while Portfolio B has 100 securities.Because of diversification effects, we would expect Portfolio B to have the lower risk.However, it is possible for Portfolio A to be less risky.

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Definitions:

General

Relating to or involving all or most people, things, or places, especially without specifying details.

Opposite

Pertaining to something that is diametrically different in position, direction, or character from something else.

Division

The fallacy of inferring that a part has a property merely because the whole has that property.

Generalizations

Statements or conclusions drawn from specific cases or instances that extend to broader or more general conditions.