Which of the Following Would Most Closely Resemble the True

question 96

Multiple Choice

Which of the following would most closely resemble the true market portfolio?

• A) Stocks
• B) Stocks and bonds
• C) Stocks, bonds and foreign securities
• D) Stocks, bonds, foreign securities and options
• E) Stocks, bonds, foreign securities options and coins

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Definitions:

Budget Line

A visual depiction showing every potential mix of two products that a specific income and price levels can buy.

Utility

In economics, the total satisfaction received from consuming a good or service.

Indifference Map

A graphical representation of different combinations of two goods or bundles among which a consumer is indifferent.

Indifference Curve

A graph representing combinations of goods or services among which a consumer is indifferent, showing preference levels and the trade-offs between different bundles.