Which of the Following Is Most Likely to Occur as You

question 79

Multiple Choice

Which of the following is most likely to occur as you add randomly selected stocks to your portfolio,which currently consists of 3 average stocks?

• A) The diversifiable risk of your portfolio will likely decline,but the expected market risk should not change.
• B) The expected return of your portfolio is likely to decline.
• C) The diversifiable risk will remain the same,but the market risk will likely decline.
• D) Both the diversifiable risk and the market risk of your portfolio are likely to decline.
• E) The total risk of your portfolio should decline,and as a result,the expected rate of return on the portfolio should also decline.

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Definitions:

MATCH Function

A function in Excel and other spreadsheet applications that searches for a specified item in a range of cells, and then returns the relative position of that item.

Total Row

A feature in spreadsheet software that automatically calculates and displays the sum, average, count, or other statistics for data in a column.

Table Tools

A collection of tools or features in word processing and spreadsheet software designed to format, edit, and manage tables.

Descriptive Table Name

A clearly defined and meaningful name assigned to a table in a database to indicate its contents or purpose.