A Diversified Securities Portfolio Is Characterized by

question 140

Multiple Choice

A diversified securities portfolio is characterized by

• A)dissimilar risk and return characteristics of the securities.
• B)concentrating on a single industry.
• C)minimal loss potential.
• D)stable earnings.
• E)formula timing.

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Definitions:

Utility Function

Describes how different combinations of goods or outcomes are valued by an individual, helping to predict choice under uncertainty.

Income

The financial gain or revenue received by an individual or entity, typically through wages, investments, or business operations.

Prices

The amount of money expected, required, or given in exchange for goods or services.

Marginal Rate

The rate of change in cost or benefit resulting from a particular increase in volume or activity.