Question

the shares traded publicly in an efficient market are . question 18 options: generally negatively affected by diversification, because of the increase in risk generally positively affected by diversification, because of the reduction in risk generally not affected by diversification, unless greater returns are expected generally negatively affected by diversification, because of the increase in the required rate of return

Answer 1

Shares traded publicly in an efficient market are generally not affected by diversification, unless greater returns are expected.

Step-by-step explanation:

The shares traded publicly in an efficient market are generally not affected by diversification, unless greater returns are expected.

Diversification involves buying stocks or bonds from a wide range of companies to reduce risk. In an efficient market, the prices of publicly traded shares are determined by market forces and the expectations of investors, rather than diversification alone.