Which of the following statements is (are) correct?(x)A major economic downturnis a source of systematic riskand...

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Which of the following statements is (are) correct?(x)A majoreconomic downturnis a source of systematic riskand the departure ofa firm's chief executive officer(CEO) is a source of unsystematicrisk.(y)During a recession, systematic risk will increase andunsystematic risk will decrease.(z)Adding more unrelated securitiesto a portfolio reduces unsystematic risk.
A.(x), (y) and (z
)B.(x) and (y) only
C.(x) and (z) only
D.(y) and (z) only
E.(z) only
Which of the following statements is correct?
A.The dollar return is a more useful measure to compareperformance than percentage return because it more accuratelyreflects the change in wealth of the investor.
B.It is necessarily true that when an investment achieves a highreturn it is a risky investment
.C.By adding stocks to your portfolio, it is possibletoeffectively eliminate nearly all of the market risk.
D.A low standard deviation means that the investment is lesslikely to achieve high returns; which means that it is morerisky.
E.None of these statements are correct

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4.3 Ratings (913 Votes)

ans 1 c is correct Examples of unsystematic risk include things such as strikes outcomes of legal proceedings or natural disasters This risk is also known as diversifiable risk since it can be eliminated by sufficiently diversifying a portfolio See Answer

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Which of the following statements is (are) correct?(x)A majoreconomic downturnis a source of systematic riskand the departure ofa firm's chief executive officer(CEO) is a source of unsystematicrisk.(y)During a recession, systematic risk will increase andunsystematic risk will decrease.(z)Adding more unrelated securitiesto a portfolio reduces unsystematic risk.A.(x), (y) and (z)B.(x) and (y) onlyC.(x) and (z) onlyD.(y) and (z) onlyE.(z) onlyWhich of the following statements is correct?A.The dollar return is a more useful measure to compareperformance than percentage return because it more accuratelyreflects the change in wealth of the investor.B.It is necessarily true that when an investment achieves a highreturn it is a risky investment.C.By adding stocks to your portfolio, it is possibletoeffectively eliminate nearly all of the market risk.D.A low standard deviation means that the investment is lesslikely to achieve high returns; which means that it is morerisky.E.None of these statements are correct