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Diversifying to Reduce Volatility Is a Good Idea Only If

Question 40

Multiple Choice

Diversifying to reduce volatility is a good idea only if


A) shareholders can diversify within their own investment portfolios at low cost.
B) firms are willing to invest in capital formation.
C) firms account for social costs of production.
D) shareholders are willing to pay premium for a company in order to reduce return volatility.

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