Comparing a Minor Item,like a Waitress Overcharging You,with a Major

question 15

Multiple Choice

Comparing a minor item,like a waitress overcharging you,with a major one,like Bernie Madoff,is an example of a

• A)slippery slope argument.
• B)straw person argument.
• C)circular reasoning argument.
• D)moral equivalence argument.

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Definitions:

Well-Diversified Portfolio

An investment portfolio that spreads risk across various asset classes, industries, or geographical regions to reduce the impact of any single investment's poor performance.

Single Index Model

A simplified model to estimate security returns that relates these returns to a single market index, accounting for market risk.

Portfolio's Sigma

Portfolio's Sigma, often synonymous with standard deviation, quantifies the overall risk or volatility of a portfolio, indicating how its returns can vary from the expected return.

Single Index Model

A financial model that describes the return of a stock as a function of the return of a market index, plus a residual unique to the stock.