By spreading her investments out over many different assets, an investor achieves
A) a higher expected return.
B) increased risk.
C) diversification.
D) greater liquidity.
C
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Firms in perfectly competitive industries are unable to control the prices of the products they sell and earn a profit in the long run. Which of the following is one reason for this?
A) Firms from other countries are able to produce similar products at lower costs. B) Firms in perfectly competitive industries can use advertising in the short run to persuade consumers that their products are better than those of other firms. But eventually consumers realize that all of the firms sell virtually identical products. C) Firms in these industries sell identical products. D) Owners of perfectly competitive firms realize that their short-run profits are temporary. Therefore, they either sell their businesses or develop other products that will earn short-run profits.
Mutual funds ________
A) accept deposits and issue loans B) sell shares and buy financial instruments C) are a special type of commercial bank D) issue policies and receive premiums
The product life cycle theory of comparative advantage predicts that a new product will first be produced and exported by:
a. the nation that was first to demand the new product. b. the first firm to successfully copy the technology. c. the nation in which it was invented. d. the countries with the most stable economy and fewest restrictions on foreign trade. e. the company with the most extensive network of international distributors for the product.
Which of the following represents the most contractionary fiscal policy?
A. A $30 billion tax cut. B. A $30 billion increase in government spending. C. A $30 billion tax increase. D. A $30 billion decrease in government spending.