Portfolio a Has but One Security, While Portfolio B Has

question 8

True/False

Portfolio A has but one security, while Portfolio B has 100 securities.Because of diversification effects, we would expect Portfolio B to have the lower risk.However, it is possible for Portfolio A to be less risky.

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Definitions:

Temperament Problems

Issues or difficulties in managing or expressing emotions and behaviors that are typically observed early in life and can affect an individual's interactions and development.

Environment

The surrounding physical, social, and cultural conditions in which an individual lives and develops.

Adaptations

Changes in organisms over time that enhance their survival and reproductive success in a particular environment.

Behavioral Inhibition

A temperament characterized by a tendency to react with fear or withdrawal in new or unfamiliar situations.