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How Must You Allocate Your Money Among a Number of Investments

question 158

Essay

How must you allocate your money among a number of investments so that your portfolio's overall rate of return will be the same as the simple average of the rates of return on individual investments?


Definitions:

Behavioral

Related to or concerned with the actions or reactions of a person or group in response to external or internal stimuli.

Cognitive

Relating to mental processes such as perception, memory, reasoning, and problem solving.

Affective

Pertaining to emotions or feelings and their expressions.

Dispositional

Referring to inherent qualities of mind and character of an individual.

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