Portfolio a Has but One Security, While Portfolio B Has

question 8

True/False

Portfolio A has but one security, while Portfolio B has 100 securities.Because of diversification effects, we would expect Portfolio B to have the lower risk.However, it is possible for Portfolio A to be less risky.

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Definitions:

Leptin

A hormone, secreted by fat cells, that is associated with decreasing eating behavior based on long-term body fat regulation.

Ghrelin

A hormone, secreted by an empty stomach, that is associated with increasing eating behavior based on short-term signals in the bloodstream.

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Insulin

A hormone, secreted by the pancreas, that controls glucose levels in the blood.