Diversification Refers to

question 36

Multiple Choice

Diversification refers to

• A)choosing assets so as to maximize expected return.
• B)choosing assets so as to minimize tax liability.
• C)choosing assets so as to maximize liquidity.
• D)allocating savings among different assets.

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Definitions:

Default Risk

The risk that a borrower fails to make the required payments on their debt obligation.

Canada Call Feature

A special feature on certain bonds that allows the issuer to redeem the bond before maturity in the Canadian market.

Maturity

Maturity indicates the date on which the principal amount of a financial instrument is due to be paid back.

Buyback Price

Buyback price is the price at which a company agrees to repurchase its own shares from shareholders, often as part of a share repurchase program.