When You Compile a Portfolio of Stocks, You Should Avoid

question 30

Multiple Choice

When you compile a portfolio of stocks, you should avoid including stocks that exhibit

• A) a high negative correlation.
• B) a high positive correlation.
• C) no correlation.
• D) an inverse correlation.

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Definitions:

Overthink

The process of thinking about something too much or for too long, often leading to unnecessary worry or anxiety.

Stressful Circumstances

Situations or events that cause a high level of tension, anxiety, or pressure.

Social-cognitive Perspective

A psychological approach that emphasizes the influence of social situations and cognitive processes on behavior and mental states.

Self-blaming Attributions

The tendency of individuals to attribute their failures or negative events to internal, personal factors.