In a Portfolio of Three Different Stocks, Which of the Following

question 14

Multiple Choice

In a portfolio of three different stocks, which of the following could NOT be true?

• A) The riskiness of the portfolio is less than the riskiness of each of the stocks if they were held in isolation.
• B) The riskiness of the portfolio is greater than the riskiness of one or two of the stocks.
• C) The beta of the portfolio is less than the betas of each of the individual stocks.
• D) The beta of the portfolio is greater than the beta of one or two of the individual stocks' betas.
• E) None of the above (i.e., they all could be true, but not necessarily at the same time).

---

Definitions:

Sexual Arousal

A physiological and psychological state of being awakened to sexual desire, often characterized by increased blood flow to the genitals, elevated heart rate, and, in many cases, a desire for sexual activity.

Conditioned Response

A learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without the need for prior learning.

Conditioned Stimulus

An initially neutral signal that, once associated with an unconditioned stimulus, triggers a learned response.