Which of the Following Is Most Likely to Occur as You

question 79

Multiple Choice

Which of the following is most likely to occur as you add randomly selected stocks to your portfolio,which currently consists of 3 average stocks?

• A) The diversifiable risk of your portfolio will likely decline,but the expected market risk should not change.
• B) The expected return of your portfolio is likely to decline.
• C) The diversifiable risk will remain the same,but the market risk will likely decline.
• D) Both the diversifiable risk and the market risk of your portfolio are likely to decline.
• E) The total risk of your portfolio should decline,and as a result,the expected rate of return on the portfolio should also decline.

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Definitions:

Positive Adaptation

The ability of an individual to adjust positively to changes, stressors, or adversity, improving resilience and overall well-being.

Personal Resilience

The ability to recover quickly from difficulties; toughness or the capacity to bounce back from adverse life events.

Internal Locus

The belief that one's actions and outcomes are controlled by personal decisions and efforts rather than external factors.

Extraversion

A personality trait characterized by outgoing, sociable, and energetic behavior.