객관식
Which of the following is one of the three key elements of record keeping in accounting?
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1. Introduction to Accounting
Types of Accounting
객관식
Which of the following statements is most correct concerning diversification and risk in the context of accounting and financial reporting?
A
Diversification reduces unsystematic risk by spreading investments across different assets.
B
Diversification has no impact on the risk associated with an investment portfolio.
C
Diversification increases the overall risk of an investment portfolio.
D
Diversification eliminates all types of risk, including systematic risk.
검증된 단계별 안내1
Understand the concept of diversification: Diversification involves spreading investments across various assets or industries to reduce the impact of any single asset's poor performance on the overall portfolio.
Differentiate between types of risk: Unsystematic risk (also known as specific or idiosyncratic risk) is unique to a particular company or industry and can be mitigated through diversification. Systematic risk, on the other hand, is market-wide and cannot be eliminated through diversification.
Analyze the statement 'Diversification reduces unsystematic risk by spreading investments across different assets': This is correct because diversification minimizes the impact of individual asset volatility, reducing unsystematic risk.
Evaluate the statement 'Diversification has no impact on the risk associated with an investment portfolio': This is incorrect because diversification directly reduces unsystematic risk, thereby lowering the overall risk of the portfolio.
Assess the statement 'Diversification eliminates all types of risk, including systematic risk': This is incorrect because systematic risk, such as market-wide economic changes, cannot be eliminated through diversification.
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