A Stock That Is Considered to Be a Positive Risk

question 44

Multiple Choice

A stock that is considered to be a positive risk asset is added to a portfolio.As a result,the portfolio will:

• A) have lower average returns.
• B) have a lower variance of returns.
• C) have a higher volatility of returns.
• D) have a lower correlation of returns with stock market indexes.

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Definitions:

Hippocampus

A complex structure deep within the brain, behind the hypothalamus, that plays an important role in memory processes.

Basal Ganglia

A group of structures in the brain involved in processing information on movement and coordination as well as various other cognitive and emotional activities.

Hypothalamus

A complex structure near the lower center of the brain that has direct connections to many other parts of the brain and is involved in the production of psychologically important hormones; thought to be important for mood and motivation.

Electroencephalography (EEG)

A technique for measuring the brain’s electrical activity by placing electrode sensors on the outside of the skull.