The Riskiness of Individual Assets

question 42

Multiple Choice

The riskiness of individual assets

• A) should be considered for the asset in isolation.
• B) should be considered in the context of the effect on overall portfolio volatility.
• C) should be combined with the riskiness of other individual assets in the proportions these assets constitute the entire portfolio.
• D) should be considered in the context of the effect on overall portfolio volatility and should be combined with the riskiness of other individual assets in the proportions these assets constitute the entire portfolio.

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Definitions:

Ego

A part of the psyche that mediates between the conscious, the unconscious, and the reality by deploying defense mechanisms.

Superego

A component of Sigmund Freud's psychoanalytic theory, representing the moral conscience and the ideal self, influenced by societal and parental standards.

Conservative

A political and social philosophy that promotes retaining traditional social institutions in the context of culture and civilization.

Moralistic

Pertaining to the expression of ideas about what is right or wrong behavior; often involving the imposition of moral standards onto others.