Diversification

question 81

Multiple Choice

Diversification

• A)increases the likely fluctuation in a portfolio's return, but reduces market risk.
• B)increases the likely fluctuation in a portfolio's return, but reduces firm-specific risk..
• C)reduces the likely fluctuation in a portfolio's return and reduces market risk.
• D)reduces the likely fluctuation in a portfolio's return and reduces firm-specific risk.

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Definitions:

Type I Error

The incorrect rejection of a true null hypothesis, also known as a "false positive."

P-value

A measure in statistical hypothesis testing representing the probability of observing a statistic at least as extreme as the one observed, under the assumption that the null hypothesis is true.

Null Hypothesis

A hypothesis that suggests there is no statistical significance between the specified sets of observations.

Support

In data mining and machine learning, it often refers to the frequency or occurrence of certain patterns or relationships within a dataset.