Amanda Talks with Several Different Brokers at a Social Gathering

question 121

Multiple Choice

Amanda talks with several different brokers at a social gathering. She hears the following advice from brokers A, B, and C. Which broker, if any, gave her incorrect advice?

• A)Broker A: "There are risks in holding stocks, even in a highly diversified portfolio."
• B)Broker B: "Portfolios with smaller standard deviations have lower risk."
• C)Broker C: "Stocks with greater risks offer lower average returns."
• D)They all gave her correct advice.

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Definitions:

Underbounded

Refers to systems or frameworks that lack clear or defined boundaries, often resulting in ambiguity or confusion.

Overbounded

A term not commonly defined in the referenced knowledge bases, possibly referring to the concept of over-limiting or excessively defining boundaries. NO.

External Ties

Connections or relationships that a person or organization maintains with external entities or individuals outside their immediate group or organization.

Faultline

The hypothetical dividing line that may split a group into subgroups based on one or more attributes, potentially leading to conflict or decreased group cohesion.