A Portfolio of Assets Has Lower Risk Than Holding One

question 32

Multiple Choice

A portfolio of assets has lower risk than holding one asset, but the same expected return and higher transaction costs. Which of the following statements is most correct?

• A) The portfolio is attractive to people who are risk-averse and risk-neutral, but not to risk seekers.
• B) The portfolio is attractive to investors who are risk-neutral.
• C) The portfolio is not attractive to investors who are risk-neutral.
• D) The portfolio is attractive to investors who are risk seekers.

---

Definitions:

Participatory Planning

A planning approach that involves stakeholders, especially those affected by decisions, in the decision-making process to ensure inclusivity and relevance.

Affected By

Influenced or changed by something; the state of being impacted by external factors or conditions.

Implement

To put into action or execute a plan, decision, or tool, especially in a practical context.

Staff Planners

Individuals responsible for developing, organizing, and managing staff schedules, resources, and future personnel needs.