Holding a diversified portfolio of stocks rather than an undiversified portfolio increases the variance of the entire portfolio. increases the likelihood that you will someday be as Dill

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Question 4
Holding a diversified portfolio of stocks rather
than an undiversified portfolio
increases the variance of the entire portfolio.
increases the likelihood that you will someday be as
rich as Bill Gates is today.
increases the likelihood that you will own at least
one stock that performs poorly.
1 p
increases the expected (average) return of the
portfolio.
O protects you from broad economy-wide risk.
Transcribed Image Text:Question 4 Holding a diversified portfolio of stocks rather than an undiversified portfolio increases the variance of the entire portfolio. increases the likelihood that you will someday be as rich as Bill Gates is today. increases the likelihood that you will own at least one stock that performs poorly. 1 p increases the expected (average) return of the portfolio. O protects you from broad economy-wide risk.
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