-If You Were to Create a Portfolio Designed to Reduce

question 25

Multiple Choice

$$\begin{array}{l}\text { Expected Return (\%) }\\\begin{array} { c c c c } \text { Year } & \text { Asset A } & \text { Asset B } & \text { Asset C } \\\hline 1 & 6 & 8 & 6 \\2 & 7 & 7 & 7 \\3 & 8 & 6 & 8\end{array}\end{array}$$
-If you were to create a portfolio designed to reduce risk by investing equal proportions in each of two different assets, which portfolio would you recommend?

• A) Assets A and C
• B) Assets A and B
• C) none of the available combinations
• D) cannot be determined

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Definitions:

Borderline Personality

A mental health disorder characterized by unstable moods, behavior, and relationships, often resulting in significant emotional distress.

Avoidant Personality Disorder

A mental health condition characterized by a pervasive pattern of social inhibition, feelings of inadequacy, and hypersensitivity to negative evaluation.

Fear Of Social Rejection

The fear of social rejection involves anxiety about being excluded or disapproved of by others.

Self-Importance

An overvaluation of oneself, one's abilities, or one's interests; thinking oneself as more important than others.