Question

The risk associated with a portfolio Multiple Choice grows exponentially with the number of stocks purchased. declines exponentially as the number of stocks purchased increases and continues to decline until a point of zero risk is reached. decreases as the investor increases the number of stocks in her portfolio. increases as the investor increases the number of stocks in her portfolio.

Answer 1

Answer:

decreases as the investor increases the number of stocks in her portfolio.

Explanation:

In Business, a portfolio can be defined as a wide range of financial investments such as bonds, stocks, cash, commodity, real estate, cash equivalent, art etc that are being held by an individual or organization.

The risk associated with a portfolio decreases as the investor increases the number of stocks in her portfolio.

This ultimately implies that, as the number of assets being held by an individual or organization increases, the risk associated with such a portfolio decreases. Generally, this is referred to as diversification.