What Is a Portfolio

question 43

Multiple Choice

What is a portfolio?

• A)A group of single assets held by an investor
• B)A type of derivative security
• C)A type of risk free bond
• D)None of the above

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Definitions:

Deck

A pack of cards used in games, consisting typically of 52 pieces divided into four suits.

Addition Law

A probability law used to compute the probability of the union of two events. It is P(A ∙ B) = P(A) + P(B) − P(A ∩ B). For mutually exclusive events, P(A ∩ B) = 0; in this case the addition law reduces to P(A ∙ B) = P(A) + P(B).

Probability

The evaluation of how likely it is for an event to happen.

Independent Events

Two or more events where the occurrence of one does not affect the probability of the others occurring.