Which of the Following Is Not Correct

question 46

Multiple Choice

Which of the following is not correct?

• A)A risk averse person might be willing to hold stocks.
• B)Other things the same,a portfolio with the stocks of a large number of companies has less risk.
• C)Other things the same,the larger a portion of savings a person invests in stocks,the greater his expected return.
• D)Diversification can eliminate market risk but not firm-specific risk.

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Definitions:

Random Variable

A variable that can take on numerical values based on the outcomes of a random event.

Value

The importance, worth, or usefulness of something or a numerical quantity measured or assigned or computed.

Test Statistic

A statistic calculated from sample data, used to assess the plausibility of a hypothesis.

Sample Standard Deviation

The square root of the sample variance, measuring how spread out sample points are from the sample mean.