A portfolio's gross selectivity is made up of
A) Manager's risk.
B) net selectivity.
C) diversification.
D) a and b.
E) b and c.

Question

Quizplus · Accepted Answer

The gross selectivity of a portfolio is a combination of its net selectivity and diversification. Net selectivity reflects the specific securities that have been chosen by the portfolio manager, whereas diversification measures the overall mix of assets in a portfolio. Therefore, options B and C are critical components of gross selectivity in a portfolio. Manager's risk (option A) is not a direct factor in gross selectivity, as it refers to the individual decisions and actions of the portfolio manager, rather than the overall makeup of the portfolio.

A Portfolio's Gross Selectivity Is Made Up of