Asset Allocation Improves Diversification,but Has No Effect on the Risk

question 64

True/False

Asset allocation improves diversification,but has no effect on the risk premium of your portfolio.

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Definitions:

AVC

Stands for Average Variable Cost, which is the total variable costs divided by the quantity of output produced.

Total Revenue

The sum of income a company receives from its business activities, usually from the sale of goods and services to customers.

Shutdown Point

The level of production and price at which a company's revenue is just enough to cover its variable costs, making it indifferent between continuing operations and shutting down.

Market Price

Refers to the current price at which a good or service can be bought or sold in a marketplace.