Question
WHICH OF THE FOLLOWING IS FALSE CONCERNING DIVERSIFICATION? ASSUME THAT THE SECURITIES BEING CONSIDERED FOR SELECTION INTO A PORTFOLIO ARE NOT PERFECTLY CORRELATED. SELECT ONE:
WHICH OF THE FOLLOWING IS FALSE CONCERNING DIVERSIFICATION? ASSUME THAT THE SECURITIES BEING CONSIDERED FOR SELECTION INTO A PORTFOLIO ARE NOT PERFECTLY CORRELATED. SELECT ONE: A. AS MORE SECURITIES ARE ADDED TO THE PORTFOLIO, THE PORTFOLIO RISK EVENTUALLY APPROACHES THE LEVEL OF SYSTEMATIC RISK IN THE MARKET. B. IF YOU HOLD MORE THAN 100 SECURITIES THEN THERE IS LITTLE BENEFIT TO BE GAINED BY ADDING A 101ST SECURITY TO THE PORTFOLIO. C. AS MORE SECURITIES ARE ADDED TO THE PORTFOLIO, THE TOTAL RISK OF THE PORTFOLIO DECLINES. D. AS MORE SECURITIES ARE ADDED TO THE PORTFOLIO, THE SYSTEMATIC RISK OF THE PORTFOLIO DECLINES. E.AS MORE SECURITIES ARE ADDED TO THE PORTFOLIO, THE UNSYSTEMATIC RISK OF THE PORTFOLIO DECLINES.
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Options Futures And Other Derivatives
Authors: John C. Hull
8th Edition
0132164949, 9780132164948
