An Increase in the Number of Corporations in a Portfolio

question 6

Multiple Choice

An increase in the number of corporations in a portfolio from 1 to 10 reduces

• A)market risk by more than an increase from 110 to 120.
• B)market risk by less than an increase from 110 to 120.
• C)firm-specific risk by more than an increase from 110 to 120.
• D)firm-specific risk by less than an increase from 110 to 120.

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Definitions:

Atomic Components

Fundamental or basic elements that make up a larger system, often used in reference to the smallest parts of matter or conceptual frameworks.

Symbolic Notation

A system of symbols used to represent numbers, operations, relations, or concepts in various fields such as mathematics, physics, and logic.

Atomic Components

The smallest parts or units that make up a larger complex structure, often indivisible in context.

Symbolic Notation

A system of symbols and notations used to represent specific actions, processes, or entities in a concise and standardized manner.