During the most recent recession, many people temporarily lost substantial value in their retirement investment portfolios because most of the assets (including stocks, bonds, and real estate) all declined in value at the same time
In hindsight, what was the problem with these portfolios? A) The portfolios were not adequately diversified because the assets were negatively correlated, so all of the assets had negative returns at the same time.
B) The portfolios were not adequately diversified because the assets were more positively correlated than expected, so all of the assets had negative returns at the same time.
C) The portfolios were adequately diversified, but the assets should have been more positively correlated to protect against recession risk.
D) The investors should not have diversified their investments to protect against recession risk.
B
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If real GDP grew 5 percent last year and the population grew 2 percent, then real GDP per person grew by ________ percent
A) 2 B) 5 C) 3 D) 7 E) 10
The figure below shows the demand for meals at lunch and dinner for a proposed new restaurant. Suppose the marginal cost of a meal (both lunch and dinner) is constant at $10 per meal and marginal cost of providing the capacity is constant at $5 per meal. Once the managers have determined the profit-maximizing capacity, at lunch they will serve ________ meals and set a price of ________ per meal.
A) 800; $30 B) 200; $20 C) 200; $30 D) 600; $30
In general, price controls have a:
A. larger effect in the long run because demand and supply become more elastic over time. B. larger effect in the short run since demand and supply become more elastic over time. C. smaller effect in the long run since demand and supply become less elastic over time. D. smaller effect in the short run because demand and supply become less elastic over time.
A firm will operate in the short run as long as it can cover its _______________.
Fill in the blank(s) with the appropriate word(s).