Which of the Following Statements Is True Regarding a Portfolio's

question 48

Multiple Choice

Which of the following statements is true regarding a portfolio's diversification?

• A) proper diversification can reduce or eliminate systematic risk
• B) the risk-reducing benefits of diversification do not occur meaningfully until at least 16 or more securities have been added to the portfolio
• C) because diversification reduces a portfolio's total risk, it must reduce the portfolio's expected return
• D) as more securities are added to a portfolio, total risk would be expected to fall at a decreasing rate under normal conditions

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Definitions:

Neurotransmitter

Chemical substances released from neuron endings to transmit signals across synapses to other neurons, muscles, or glands.

Peptide Transmitters

Short chains of amino acids that act as neurotransmitters in the brain.

Amino Acid Transmitters

Chemical substances in the brain that act as neurotransmitters, including glutamate and GABA, playing key roles in transmitting signals across the synaptic gap between neurons.

Neurochemical Neurons

Specialized neurons that produce and release chemicals (neurotransmitters) to communicate with other neurons, influencing a wide array of functions and behaviors.