Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

By holding a portfolio of more than 30 stocks, this portfolio can have:

Higher unsystematic risk compared to a single stock

Significantly reduced unsystematic risk due to diversification

No risk at all

Increased exposure to systematic risk only

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Verified step by step guidance

Understand the concept of unsystematic risk: Unsystematic risk, also known as diversifiable risk, is the risk specific to a company or industry. It can be mitigated through diversification by holding a variety of stocks in a portfolio.

Understand the concept of systematic risk: Systematic risk, also known as market risk, is inherent to the entire market and cannot be eliminated through diversification. Examples include interest rate changes, inflation, and economic recessions.

Recognize the role of diversification: Diversification involves holding multiple stocks across different industries to reduce unsystematic risk. By spreading investments, the impact of poor performance in one stock or industry is minimized.

Analyze the options provided: Holding a portfolio of more than 30 stocks significantly reduces unsystematic risk due to diversification. However, systematic risk remains and cannot be eliminated.

Conclude that the correct answer is: 'Significantly reduced unsystematic risk due to diversification,' as diversification reduces company-specific risks but does not eliminate market-wide risks.