Assuming That Stocks Represent Most Industries,the Number of Stocks Necessary

question 98

Multiple Choice

Assuming that stocks represent most industries,the number of stocks necessary to eliminate nearly all unsystematic risk varies from ________.

• A)5 to 10
• B)10 to 20
• C)20 to 30
• D)30 to 50

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, expected to be recovered after its use is completed.

Monthly Depreciation

The portion of an asset’s cost that is expensed each month over its useful life.

Old Plant Asset

An asset that has been in use for a considerable period and is often nearing the end of its useful life.

Financial Accounting

The field of accounting that focuses on providing information to external users to make informed economic decisions.