Which of the Following Statements Is Correct

question 129

Multiple Choice

Which of the following statements is correct?

• A)A stock's beta is less relevant as a measure of risk to an investor with a well-diversified portfolio than to an investor who holds only that one stock.
• B)If an investor buys enough stocks, he or she can, through diversification, eliminate all of the diversifiable risk inherent in owning stocks. Therefore, if a portfolio contained all publicly traded stocks, it would be essentially riskless.
• C)Portfolio diversification reduces the variability of returns (as measured by the standard deviation) of each individual stock held in a portfolio.
• D)A security's beta measures its nondiversifiable, or market, risk relative to that of an average stock.

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Definitions:

Power Dynamics

The ways in which power is distributed and exercised within relationships or social structures.

The Personal Is Political

A principle highlighting that personal experiences are often rooted in larger social and political structures.

Political Issues

Problems or debates that are associated with government policies, political ideologies, or the administration of public affairs.

Social Context

The environmental and social settings that influence individuals' behaviors, perceptions, and interactions with others.