Which of the Following Is Most Likely to Occur as You

question 74

Multiple Choice

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

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

---

Definitions:

Copyrights

A form of intellectual property law that gives the creator of an original work exclusive rights to its use and distribution, typically for a certain period.

Franchises

Business models where owners license their operations, products, branding, and procedures to independent operators.

Private Sale

The sale of property or goods directly from the owner to a buyer without the use of public auctions or marketplaces.

Commercially Unreasonable

Actions or decisions in business that are not justifiable from a commercial standpoint, often leading to disputes.