Kevin Recently Received an Inheritance, and He Is Planning to Invest

question 27

Multiple Choice

Kevin recently received an inheritance, and he is planning to invest the inheritance in one of four stock portfolios. Which of these portfolios would you expect to have the highest average annual rate of return?

• A)A portfolio with a standard deviation of 5%.
• B)A portfolio with a standard deviation of 6%.
• C)A portfolio with a standard deviation of 8%.
• D)A portfolio with a standard deviation of 9%.

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Definitions:

Self-governing

Having the ability or authority to rule, govern, or control oneself or an organization without external control.

Scope of Practice

The boundaries defining the extent of activities, services, and responsibilities a professional is permitted to perform based on qualifications, training, and licensure.

Paradigm

A paradigm is a distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field.

Belief System

A coherent set of beliefs and values that guide the way an individual perceives, understands, and interacts with the world.