Ask Question
BusinessBusiness
19 January, 23:27

David increases the number of companies in which he holds stocks.

a. this raises firm-specific risk, but lowers market risk. what happens to overall risk is unclear.

b. this raises market risk, but lowers firm-specific risk. what happens to overall risk is unclear.

c. this reduces risk's standard deviation and firm-specific risk.

d. this reduces risk's standard deviation and market risk.

+2
Answers (1)
  1. 20 January, 01:24
    0
    The answer is letter c. Standard deviation is applied to the yearly rate of profit of an investment to measure the investment's instability. While specific risk, relates to dangers that are very precise to accompany or small group of businesses. This kind of risk would be the contradictory of a total market risk. Occasionally mentioned to as "diversifiable risk." When you invest in many companies, you become one of the owners of those corporations. What you can make or lose on a stock is recognized as the return on investment, and it hinge on the attainment of the company you've invested in. If those companies do well and creates money from the yields or services it vends, you should assume to benefit from that achievement.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “David increases the number of companies in which he holds stocks. a. this raises firm-specific risk, but lowers market risk. what happens ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Zoco, a restaurant chain, introduced a new version of lemonade that was red in color and had a thick consistency. the company had relied on the fact that its drink was different from other lemonades. however, the consumers did not respond positively.
Answers (1)
On March 1, 2022, Blossom Company acquired real estate, on which it planned to construct a small office building, by paying $86,000 in cash.
Answers (2)
At the beginning of the month, the Forming Department of Martin Manufacturing had 30,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion.
Answers (1)
Company Z's CPP has a Products and Completed Operations aggregate limit of $100,000, with a $20,000 limit for each occurrence.
Answers (1)
The handwheel function is to?
Answers (1)
New Questions in Business
Dougherty Corporation purchased a new delivery van for use in its dry-cleaning business. As part of the purchase of the van the following costs were incurred: Acquisition cost 30,000, Sales tax 1,800, Title transfer 250, paid to the company logo on
Answers (1)
Horatio Alger is the product manager for Brand X, a consumer product with a retail price of $1.20. Retail margins are 35% while wholesalers take an 11.5% margin.
Answers (1)
Explain what is meant by market research.
Answers (1)
Jean, a restaurant critic, publishes a review in a national daily that the sandwiches served at his friend's deli are usually not fresh. Tom, the owner of the deli, notices a significant decrease in customers after the review gets published.
Answers (1)
Why did the Soviet Union experience many surpluses and shortfalls? A) The labor force wasn't well educated B) The cold climate made farming hard C) Central planners could not manage every detail D) The country depended on imports to obtain resources.
Answers (1)
Home » Business » David increases the number of companies in which he holds stocks. a. this raises firm-specific risk, but lowers market risk. what happens to overall risk is unclear. b. this raises market risk, but lowers firm-specific risk.
Sign Up Forgot Password?