Which Statement Is TRUE

question 32

Multiple Choice

Which statement is TRUE?

• A) To reduce portfolio risk, you should buy the majority of stocks from the industry that you work in.
• B) The riskiest stocks are those that move up and down the most with the overall economy.
• C) NASDAQ is composed of fewer stocks than the S&P 500.
• D) The least risky assets are positively correlated with your portfolio.

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Definitions:

Marginal Cost

is the change in total production cost that arises when the quantity produced is incremented by one unit, reflecting the cost of producing one additional unit of a good or service.

Marginal Cost Curve

The Marginal Cost Curve is a graphical representation showing the change in total cost that arises from producing one additional unit of a good or service.

Variable Input

An input in the production process that can be changed in the short run, such as labor and raw materials.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, assuming all other factors remain constant.