Use the Table Below to Answer the Following Question(s)

question 2

Multiple Choice

Use the table below to answer the following question(s) .
Below is a spreadsheet for a situation in which a day trader wants to decide on investing $200 in one of the index funds. Answer the following questions using PHStat.
-The covariance between these two assets indicates that ________.

• A)the overall risk increases
• B)the overall risk reduces
• C)the X index fund is riskier than the Y index fund
• D)there is no risk involved

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony in decision-making results in an irrational or dysfunctional outcome.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Unanimous Decision

An agreement on a course of action or decision by all parties or members involved without any dissent.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives.