Which One of the Following Statements Is True

question 56

Multiple Choice

Which one of the following statements is true?

• A)Risk and return are inversely related.
• B)Investors are compensated only for diversifiable risk.
• C)The beta of a portfolio may be lower than the lowest beta of any individual security held within the portfolio.
• D)How a security affects the risk of a portfolio is less important than the actual risk of the security itself.
• E)Investing has two dimensions: risk and return.

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Definitions:

Income Pyramid

A model that illustrates the distribution of income across different segments of the population, usually showing a large base of low-income earners and a small top of high-income earners.

Socioeconomic Group

A categorization of individuals or communities based on their social and economic conditions, often considered in terms of income, education, employment, and social status.

Global Economy

The international spread of capitalism, especially in recent decades, across national boundaries and with minimal restrictions by governments.

Dambisa Moyo

An international economist and author known for her work on global economic issues, including aid, poverty, and global financial systems.