You purchased two stocks that are perfectly negatively correlated
A) Your portfolio is well diversified, so you should face no risk whatsoever.
B) Even though you diversified the idiosyncratic risk away, your portfolio is still affected by systemic risks like a stock market crash.
C) Even though you diversified the systemic risk away, your portfolio is still affected by idiosyncratic risks like a stock market crash.
D) Your portfolio is not diversified; thus you face no systemic risk.
B
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Marginal cost is calculated for a particular increase in output by
A) dividing the change in total cost by the change in output. B) dividing the total cost by the change in output. C) multiplying the total cost by the change in output. D) multiplying the change in total cost by the change in output.
If the central bank targets the money stock, then a negative shock to money demand will
a. shift the LM schedule to the right and income will rise above the target level. b. shift the LM schedule up and income will fall below the target level. c. not shift the LM schedule and, therefore, will not displace income from the target level. d. None of the above
Which of the following statements is true?
a. If the income elasticity of demand is less than zero, the good is an inferior good. b. Only if the demand curve is vertical will sellers raise the price by the full amount of a tax. c. Two goods are substitutes if the cross-elasticity of demand coefficient is positive. d. A price elasticity of supply coefficient equal to 1.5 means the product exhibits an elastic supply and a 10 percent increase in the price will increase the quantity supplied by 15 percent. e. All of these.
The selling of a good or service abroad at a price below production costs is
A) marginal cost selling. B) price discrimination. C) price differentiation. D) dumping.