Spreading Risk Involves

question 95

Multiple Choice

Spreading risk involves:

• A) finding assets whose returns are perfectly negatively correlated.
• B) adding assets to a portfolio that move independently.
• C) investing in bonds and avoiding stocks during bad times.
• D) building a portfolio of assets whose returns move together.

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Definitions:

Pounds

Pounds is a unit of weight commonly used in the United States and the British Commonwealth, equivalent to 0.453592 kilograms.

Chicken Stock

A flavorful liquid prepared by simmering chicken bones, vegetables, and herbs, used as a base for soups and sauces.

Liters

A metric unit of capacity, commonly used for measuring volumes of liquid, equal to 1000 cubic centimeters or about 1.76 pints.

Organic Vanilla

Refers to vanilla products that are produced following organic farming practices without the use of synthetic pesticides, artificial fertilizers, or genetically modified organisms (GMOs).