Which One of the Following Indicates a Portfolio Is Being

question 83

Multiple Choice

Which one of the following indicates a portfolio is being effectively diversified?

• A)an increase in the portfolio beta
• B)a decrease in the portfolio beta
• C)an increase in the portfolio rate of return
• D)an increase in the portfolio standard deviation
• E)a decrease in the portfolio standard deviation

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Definitions:

Rent

A periodic payment made for the use of land or a building to the owner by the tenant.

Wages

Payments made to workers for their labor, typically calculated on an hourly, daily, or piecework basis.

Frank Knight

An influential economist known for his work on risk, uncertainty, and the role of entrepreneurship in economic theory.

Joseph Schumpeter

An Austrian economist and political scientist known for his theories on business cycles and innovation. He introduced the concept of creative destruction, which describes how old industries are destroyed and replaced by new ones.