Diversification of a portfolio leads to:
a. a negative correlation between the investments.
b. a lower mean of returns.
c. a lower variance of returns.
d. a higher standard deviation of returns.
C
You might also like to view...
Which of the following is NOT part of the monetary base?
A) currency B) reserves of depository institutions C) the public's checking deposits at commercial banks D) commercial banks' reserves.
Active stabilization policy can be rationalized in the New Keynesian model because
A) it makes it possible to obtain zero inflation. B) the government knows best. C) it counteracts the influence of unions. D) it allows a faster return to economic efficiency.
To simplify our consumption models, suppose U.S. consumers only purchase food and all other goods where food is plotted along the horizontal axis of the indifference map
Also, suppose that all states initially impose state sales taxes on all goods (including food), but then the states exempt food from the state sales tax. How does this tax policy change alter the consumer's budget line? A) Makes the budget line steeper B) Makes the budget line flatter C) Parallel rightward shift D) Parallel leftward shift E) none of the above
Refer to Scenario 15.6. The expected NPV of the computer purchase is approximately
A) $3,200. B) $5000. C) $10,000. D) $68,000. E) $96,000.