Author Question: Which explanation below is most appropriate in explaining why diversification can reduce investment ... (Read 19 times)

ssal · **on:** Jul 11, 2018

Which explanation below is most appropriate in explaining why diversification can reduce investment risk?

A)

The greater the number of assets held, the greater the portfolio return.
B)

The greater the risk taken, the greater the portfolio return.
C)

Asset returns are often poorly correlated.
D)

Asset returns tend to be stable over time.

Question 2

Which of the following statements concerning flexible spending accounts is false?

A)

They are also known as cafeteria plans.
B)

Unspent funds may be held over for subsequent years.
C)

Employees may voluntarily contribute pretax dollars to this account.
D)

Expenditures from the account are subject to IRS restrictions.