You Are Considering Adding a New Security to Your Portfolio

question 4

Multiple Choice

You are considering adding a new security to your portfolio. To decide whether you should add the security, you need to know the security's:
I. Expected return
II. Standard deviation
III. Correlation with your portfolio

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

Understand the sequence and components of the selection process.

Recognize biases and their effects on the selection process.

Understand the types and purposes of employment tests.

Differentiate between structured, unstructured, and other interview styles and their appropriateness.

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Definitions:

Mental Development

Refers to the cognitive growth and progression in understanding, problem-solving, and decision-making abilities throughout a person's life.

Mental Ability

The capacity to perform cognitive tasks, process information, and understand concepts through various mental faculties like reasoning, memory, and problem-solving.

Rudimentary Sense

A basic or elementary level understanding or feeling, often referring to the most simple and fundamental aspects of a concept.

Chimpanzees

A species of great ape native to the forests and savannahs of tropical Africa, known for their complex social behaviors and intelligence.