Which of the Following Statements Is Correct

question 33

Multiple Choice

Which of the following statements is correct?

• A) The dollar return is a more useful measure to compare performance because it more accurately reflects the change in wealth of the investor.
• B) A dominant portfolio is one that has the highest risk and highest return within a set of portfolios.
• C) By adding stocks to your portfolio, it is possible to effectively eliminate nearly all of the market risk.
• D) None of these choices are correct.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are substitutes but differentiated from each other in some way.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that buyers are willing to purchase at various prices.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of output.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and differentiated competition.