Given the Following Parents and Components, How Many Bs Are

question 34

Multiple Choice

Given the following parents and components, how many Bs are required to make an X? Quantities are shown in brackets.
$$\begin{array} { l l l } \text { Parent } & \mathrm { X } & \mathrm { A } \\\text { Component } & \mathrm { A } ( 2 ) & \mathrm { B } ( 2 ) \\& \mathrm { B } ( 1 ) & \mathrm { D } ( 1 ) \end{array}$$

• A) 1
• B) 2
• C) 3
• D) 4
• E) 5

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Definitions:

Markowitz Model

A portfolio optimization theory that demonstrates how to achieve the best portfolio allocation to maximize return for a given level of risk through diversification.

Systematic Risk

The risk inherent to the entire market or entire market segment, which cannot be eliminated through diversification.

Index Model

A model that describes the relationship between the returns of a stock and the returns of a market index.