The risk of a portfolio
a. increases as the number of stocks in the portfolio increases.
b. is usually measured using a statistic called the standard diversification.
c. is positively related to the average return of the portfolio.
d. bears no relationship to the average return of the portfolio.
c
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Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are TRUE?
A) Stocks are a far more important source of finance than are bonds. B) Stocks and bonds, combined, supply less than one-half of the external funds. C) Financial intermediaries are the least important source of external funds for businesses. D) Since 1970, more than half of the new issues of stock have been sold to American households.