Spreading risk involves:
A. adding assets to a portfolio that move independently.
B. finding assets whose returns are perfectly negatively correlated
C. investing in bonds and avoiding stocks during bad times.
D. building a portfolio of assets whose returns move together.
Answer: A
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Which of the following statements is true?
a. Total utility is the extra satisfaction from the consumption of a good or service. b. Marginal utility is the amount of satisfaction received from all the units of a good or service consumed. c. The law of diminishing marginal utility states that as more of a good or service is consumed total utility decreases. d. Consumer equilibrium is a combination of goods and services consumed which maximizes total utility from a given budget.
Economists define a labor market with only one buyer to be:
a. a monopoly. b. an oligopoly. c. a monopsony. d. perfectly competitive. e. backward bending.
Which of the following are not considered part of government purchases?
A) welfare benefits B) teachers' salaries paid by a local government C) a tank purchased by the federal government D) a bridge purchased by the state government
Say’s Law implies that
a. production generates income, which is all spent to purchase what was produced. b. demand creates its own supply. c. markets do not clear. d. demand determines real output.