Portfolio a Has but One Security, While Portfolio B Has

question 77

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 relevant risk, but it is possible for Portfolio A to be less risky.

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Definitions:

Utility

In economics, the total satisfaction received from consuming a good or service.

Big Five Personality Dimensions

A model outlining five broad dimensions of human personality: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism.

Neuroticism

A personality trait characterized by the tendency to experience negative emotions such as anxiety, anger, or depression more easily than others.

Extraversion

A personality trait typified by outgoingness, high energy, and a preference for social interactions.