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Essentials Of Investments
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
Section: Chapter Questions
Problem 1PS
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Which of the following statement is TRUE? O A. Increase in federal reserve funds rate is an example of diversifiable risk. O B. As you add stocks from different companies, we would expect total risk to go down because of a reduction of unsystematic risk. OC. Beta is a measure of unsystematic risk. O D. If you hold stock in a winter clothing company and want to reduce risk through diversification, you should add shares of stock from a snow boots company rather than from an ice cream company.
Transcribed Image Text:Which of the following statement is TRUE? O A. Increase in federal reserve funds rate is an example of diversifiable risk. O B. As you add stocks from different companies, we would expect total risk to go down because of a reduction of unsystematic risk. OC. Beta is a measure of unsystematic risk. O D. If you hold stock in a winter clothing company and want to reduce risk through diversification, you should add shares of stock from a snow boots company rather than from an ice cream company.
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