Portfolio Diversification

question 121

Multiple Choice

Portfolio diversification

• A)means that one should own at least 10 different stocks.
• B)means that one should own at least two different stocks whose prices do not always move in the same direction.
• C)means that one should own at least two different stocks.
• D)is something that can be achieved only by the very wealthy.
• E)means that one should own at least five different stocks whose prices do not always move in the same direction.

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Definitions:

High-Stress Situation

Circumstances that significantly increase the emotional or physical stress levels of an individual or group.

Kelly's Covariation Theory

A psychological theory that explains how people attribute causation based on the consistency, distinctiveness, and consensus of an observed behavior.

Causal Attributions

The process by which individuals infer the causes of their own and others' behaviors, actions, and events.

Distinctiveness

The quality of being uniquely different from others in some respect, often used to describe features that distinguish one person, group, or thing from another.