The Statement "A Portfolio Is Less Than the Sum of Its

question 82

Multiple Choice

The statement "A portfolio is less than the sum of its parts." means

• A) it is less expensive to buy a group of assets than to buy those assets individually.
• B) portfolio returns will always be lower than the returns on individual stocks.
• C) a diversified group of assets will be less volatile than the individual assets within the group.
• D) for reasons that are not well understood, the value of a portfolio is less than the sum of the values of its components.

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Definitions:

Buyers Pay More

Refers to situations where consumers end up paying a higher price for goods or services due to various factors like increased demand or decreased supply.

Tax on Sellers

A financial charge imposed by a government on sellers of goods or services, which can affect market prices and quantities.

Market Size

The total volume of a market, often measured in terms of total sales, that is available for a product or service.

Tax on Buyers

A financial charge imposed on purchasers within a market, which can shift demand curves and affect market equilibrium.