The Strategy of Investing in Several Assets So That Any

question 48

Multiple Choice

The strategy of investing in several assets so that any possible losses are independent events is:

• A)diversification.
• B)private information.
• C)moral hazard.
• D)adverse selection.

Know when and how to measure internal consistency reliability.

Recognize the difficulty in establishing construct validity and its significance.

Understand the equation that represents the relationship between observed scores, true scores, and error.

Understand how error impacts reliability and the general equation for reliability.

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Definitions:

Breach-of-Contract

An act of breaking the terms set out in a contract, which can lead to legal consequences and damages.

Preexisting Duty Rule

A legal principle stating that performing a duty that one is already legally obligated to do is not sufficient consideration for a new contract.

Illusory Promise

A statement that appears to be a promise but does not actually bind the party to any commitment or obligation.

Redistribution of Wealth

A process or policy aimed at adjusting the distribution of wealth within a society, usually by transferring wealth from the richer to the poorer segments.