An Increase in the Number of Corporations in a Portfolio

question 62

Multiple Choice

An increase in the number of corporations in a portfolio from 110 to 120 reduces

• A)market risk by more than an increase from 1 to 10.
• B)market risk by less than an increase from 1 to 10.
• C)firm-specific risk by more than an increase from 1 to 10.
• D)firm-specific risk by less than an increase from 1 to 10.

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Definitions:

Unskilled Labor

Labor that requires no specialized skills, education, or training, and typically involves simple tasks that can be easily learned on the job.

Market Wage

The prevailing rate of pay for labor in a particular industry or occupation, determined by the supply and demand for labor in that market.

Government Intervention

Actions taken by a government to influence its economy, which can include regulations, subsidies, and tariffs.

Market Economy

An economic system where supply and demand from private enterprises and consumers dictate the production of goods and services.