You Have a Portfolio Consisting of Equal Amounts of Royal

question 378

Multiple Choice

You have a portfolio consisting of equal amounts of Royal Bank stock and Treasury bills. If you replace half of the Treasury bills with more Royal Bank stock, the portfolio expected return will likely ___________, all else the same.

• A) Increase.
• B) Decrease.
• C) Remain unchanged.
• D) Either increase or decrease.
• E) Decrease if IBM is considered a small-cap stock.

---

Definitions:

WAIS-III

The Wechsler Adult Intelligence Scale-Third Edition, a widely used tool for measuring adult intelligence.

Mean Score

The arithmetic average of a set of numerical values, calculated by adding them together and dividing by the number of terms in the set.

Stanford-Binet

A standardized test that assesses intelligence and cognitive abilities in individuals, originally developed to measure intelligence in children.

Cohort Effect

Differences among groups of individuals that arise from being born and living in different time periods, affecting their beliefs, behaviors, and attitudes.