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As Diversification Increases The Firm-Specific Risk Of A Portfolio Approaches

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As Diversification Increases The Firm-Specific Risk Of A Portfolio Approaches. The of the asset b. The of the asset d.

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Analysts may use regression analysis to estimate the index model for a stock. Diversification of the portfolio increases by adding many securities in the portfolio, and as more securities are added, unique risk which is also called unsystematic risk of the portfolio decreases and become zero. Analysts may use regression analysis to estimate the index model for a stock.

However, Portfolio Diversification Cannot Eliminate All Risk From The Portfolio.


As the number of stocks in the portfolio increases the exposure to risk decreases. As diversification increases the unsystematic risk of a portfolio approaches a from econ 440 at the city college of new york, cuny. Hence option b is the answer

As More And More Securities Are Added To The Portfolio, Unsystematic Risk Decreases And Most Of The Remaining Risk Is Systematic, As Measured By The Variance (Or Standard Deviation) Of The Market Portfolio.


Thus, total risk can be divided into two types of risk: Analysts may use regression analysis to estimate the index model for a stock. Unsystematic risk decreases and most of the remaining risk is systematic;

As Diversification Increases, The Standard Deviation Of A Portfolio Approaches _____.


The variance of the market portfolio d. (1) unique risk and (2) market risk. The variance of the market portfolio.

As Diversification Increases The Unsystematic Risk Of A Portfolio Approaches A.


As more and more securities are added to the portfolio, the unsystematic risk decreases and most of the remaining risk is systematic, as measured by the variance (or std. How portfolio diversification reduces risk. Due to the influence of a single common factor represented by the market index return b.

Analysts May Use Regression Analysis To Estimate The Index Model For A Stock.


The of the asset b. The variance of the market portfolio. See the answer see the answer done loading.

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