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It Has Been Found That the Value of the Stock

Question 8

Multiple Choice

It has been found that the value of the stock of corporations whose shares are traded publicly in anefficient marketplace is


A) generally negatively affected by diversification, because of the increase in risk.
B) generally not affected by diversification, unless greater returns are expected.
C) generally positively affected by diversification, because of the reduction in risk.
D) generally negatively affected by diversification, because of the increase in the required rate of return.

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