Which of the Following Statements Is CORRECT

question 5

Multiple Choice

Which of the following statements is CORRECT?

• A) An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks.
• B) The higher the correlation between the stocks in a portfolio,the lower the risk inherent in the portfolio.
• C) It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock.
• D) Once a portfolio has about 40 stocks,adding additional stocks will not reduce its risk by even a small amount.
• E) An investor can eliminate virtually all diversifiable risk if he or she holds a very large,well-diversified portfolio of stocks.

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Definitions:

Motivate People

The act of encouraging or inspiring individuals to take action or pursue goals.

Autonomous Motivation

Motivation that arises from genuine interest or personal value, rather than external pressures or rewards.

Effective Performance

The degree to which an individual, team, or organization meets or exceeds the required outcomes or objectives.

Basic Psychological Needs

Fundamental requirements for psychological well-being, including autonomy, competence, and relatedness.