As the Number of Stocks in a Person's Portfolio Increases

question 28

Multiple Choice

As the number of stocks in a person's portfolio increases,

• A)the risk of the portfolio increases,as indicated by the increasing value of the standard deviation of the portfolio.
• B)the risk of the portfolio increases,as indicated by the decreasing value of the standard deviation of the portfolio.
• C)the risk of the portfolio decreases,as indicated by the increasing value of the standard deviation of the portfolio.
• D)the risk of the portfolio decreases,as indicated by the decreasing value of the standard deviation of the portfolio.

---

Definitions:

Management Of The Company

The process of directing and controlling a business or organization, focusing on planning, leading, and overseeing operations.

Misappropriation Theory

A theory in securities law that prohibits the trading of a company's stock or other securities by individuals who have access to non-public information about the company, under the belief that it is unfair to other investors who do not have access to the information.

Insider Trading

The unauthorized act of buying and selling stocks for personal gain by leveraging secret information.

Securities Regulation

The body of laws and rules governing the issuance, trading, and sale of securities to protect investors and ensure market integrity.