The Optimal Portfolio for You Will Be

question 82

Multiple Choice

The optimal portfolio for you will be

• A) the one that offers the lowest correlation.
• B) the one that offers the highest returns.
• C) the one that reflects the amount of risk that you are willing to take.
• D) the one that offers the most diversification.

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Definitions:

Consumer Surplus

The divergence between the price consumers are willing to pay and what they really spend on a good or service.

Floor Price

The minimum price set by regulation, often by the government, below which a commodity cannot legally be sold in the market.

Market Supply

The total amount of a specific good or service that is available to consumers in a market at a given time and price.

Equilibrium Price

Equilibrium price is the price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.