The Addition of a Negative Risk Asset to a Portfolio

question 70

Multiple Choice

The addition of a negative risk asset to a portfolio of assets will:

• A) increase the portfolio's expected return.
• B) decrease the portfolio's expected return.
• C) increase the portfolio's expected volatility.
• D) decrease the portfolio's expected volatility.

---

Definitions:

Air Travel Market

The sector of the economy that deals with selling and buying of flight services among airlines and passengers.

Supply Curve

The Supply Curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing to supply.

Automobile Supply

The total inventory or production capacity for cars and vehicles available in the market at a given time.

Wage Increase

An upward adjustment in the amount of wages or salary an employee receives for their labor.