Which of the Following Is Correct

question 4

Multiple Choice

Which of the following is correct?

• A) Investors can reduce the risk in their portfolio by investing in international stocks since they tend to have low correlation with our own stock market.
• B) Combining both stocks and bonds will likely reduce risk in a portfolio because the two assets have low correlation.
• C) Your optimal portfolio is an efficient portfolio with your desired risk level.
• D) All of these choices are correct.

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Definitions:

Production Quota

A limit set by an organization or government on the amount of a product that can be produced.

Support Price

A price level set by the government or a regulatory body to stabilize or support the market price of a commodity.

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with all else being equal.

Producer Surplus

The difference between what producers are willing to sell a good for and the higher price they actually receive.