Which of the Following Guidelines Are Appropriate for Inclusion in a Portfolio

question 52

Multiple Choice

Which of the following guidelines are appropriate for inclusion in a portfolio management policy?
I. Diversify among different types of securities and across industry and geographic lines.
II. Determine the risk level and financial situation of the individual investor.
III. Utilize beta to help align the portfolio to the risk level of the investor.
IV. Minimize the standard deviation of each security in the portfolio.

• A) I, II and IV only
• B) II, III and IV only
• C) I, II and III only
• D) I, II, III and IV

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Definitions:

Behavioral Intent

The motivation or purpose behind an individual's specific action or behavior.

Test a Hypothesis

The process of conducting experiments or observations to determine whether evidence supports or contradicts a specific prediction or assumption.

Functional Assessments

Evaluations that determine the underlying cause or function of a behavior, often used to develop effective interventions.

Functional Assessment

An evaluative process that identifies the purpose or function of a behavior, typically to develop more effective interventions.