In the context of portfolio diversification,
A) investors are compensated for diversifiable risk in the portfolio.
B) prudent investors should hold about three to five stocks in their portfolio.
C) a stock index mutual fund is a financial intermediary that offers small investors a way to participate in the performance of the stock market as a whole.
D) financial intermediaries make it more difficult to be diversified.
C
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Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are more interested in purchasing insurance c. people are not risk averse d. insurers can tell higher risk people from lower risk people
A monopolist faces a marginal revenue curve that is below the demand curve, resulting in the production of an allocatively efficient quantity
a. True b. False Indicate whether the statement is true or false