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Pachacha [2.7K]
3 years ago
6

Which of the following is correct? Group of answer choices Risk-averse people will not hold stock. Diversification cannot reduce

firm-specific risk. The larger the percentage of stock in a portfolio, the greater the risk, but the greater the average return. Stock prices are determined by fundamental analysis rather than by supply and demand.
Business
1 answer:
pshichka [43]3 years ago
6 0

Answer: The larger the percentage of stock in a portfolio, the greater the risk, but the greater the average return.

Explanation:

Stock in general is more risky than most financial instruments but this risk is accompanied with greater returns. This is why it is generally advisable to diversify stock in a portfolio.

As already mentioned, stock is risky but rewarding. It therefore follows that the more stock is in a portfolio, the risker the portfolio but the greater the average return.

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