Diversification of a portfolio()
A. can eliminate market risk, but it cannot eliminate firm-specific risk.
B. can eliminate firm-specific risk, but it cannot eliminate market risk.
C. increases the portfolio’s standard deviation.
D. is not necessary for a person who is risk averse.
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When a person engages in detailed analysis of a company to determine its value, he or she is engaging in()
A. standard deviation analysis.
B. informational analysis.
C. fundamental analysis.
D. efficiency analysis.
Fundamental analysis determines the value of a stock based on()
A. dividends.
B. the expected final sale price.
C. the ability of the corporation to earn profits.
D. All of the other three are correct.
The amount of unemployment that an economy normally experiences is called the()
A. average rate of unemployment.
B. natural rate of unemployment.
C. cyclical rate of unemployment.
D. typical rate of unemployment.
Institutions that help to match one person's saving with another person's investment are collectively called the()
A. Federal Reserve system.
B. banking system.
C. monetary system.
D. financial system.