Question

The risk in average individual stock can be reduced by placing an individual stock in

a.

low risk portfolio

b.

diversified portfolio

c.

undiversified portfolio

d.

high risk portfolio

Answer: (b).diversified portfolio

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. The risk in average individual stock can be reduced by placing an individual stock in

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. The required return is 15% and the premium for risk is 11% then the risk free return would be

Q. The market required return is subtracted from the risk free rate which is used to calculate

Q. An estimation by marginal investor, a higher expected return is earned on

Q. The term structure premium, an inflation of bond and bond default premium are included in

Q. Mostly in financials, the risk of portfolio is smaller than that of asset's

Q. If the risk can be eliminated with the help of diversification, then the relevant risk is

Q. The Treasury yielded by bond is 7% and the market required return is 13% then market risk premium will be

Q. The chance of occurrence of any event is classified as

Q. According to market risk premium, an amount of risk premium depends upon the investor

Q. When the changes in patents and industry competition occur, the required rate of return

Q. In an individual stock, the relevant risk is classified as

Q. The type of premium asked by the investors for bearing the risk on average stock is classified as

Q. The portfolio which consists of perfectly positive correlated assets having no effect of

Q. The weighted average of the probabilities is classified as

Q. The market risk and diversifiable risk are two components of

Q. The market risk premium is 8% and the risk free return is 7% then the market required return would be

Q. The range of probability distribution with 68.26% lies within

Q. In capital asset pricing model, an amount of risk that stock contributes to the portfolio of market is classified as

Q. The case in which average investors risk aversion is greater then the slope of line and risk premium respectively is

Q. The expected returns weighted average on assets in the portfolio is considered as

Recommended Subjects

Are you eager to expand your knowledge beyond Financial Management and Financial Markets? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!