When We Form an Equally Weighted Portfolio of Stocks and Keep

question 50

True/False

When we form an equally weighted portfolio of stocks and keep increasing the number of stocks in the portfolio, the volatility of the portfolio also increases.

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Definitions:

Formal Hierarchy

The explicit, officially designated structure of authority, roles, and communication in an organization, specifying how tasks are divided and coordinated.

Flexibility and Responsiveness

The ability of an organization to adapt quickly to changes and effectively respond to new demands or opportunities.

Divisionalization

The organizational strategy of dividing a company into semi-autonomous units or divisions, each focusing on a particular business sector or product line.

Decentralization

Decentralization refers to the process of distributing or dispersing functions, powers, people, or things away from a central location or authority.