Assume That Two Investors Each Hold a Portfolio, and That

question 74

True/False

Assume that two investors each hold a portfolio, and that portfolio is their only asset.Investor A's portfolio has a beta of minus 2.0, while Investor B's portfolio has a beta of plus 2.0.Assuming that the unsystematic risks of the stocks in the two portfolios are the same, then the two investors face the same amount of risk.However, the holders of either portfolio could lower their risks, and by exactly the same amount, by adding some "normal" stocks with beta = 1.0.

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Definitions:

Storage

The mental “holding on” to information between the time it is encoded and the time it is retrieved.

Retrieval Cue

A stimulus, whether internal or external, that facilitates the recall of information from memory.

Memory Anchor

A technique or tool used to facilitate the process of memory recall.

Target Memory

The specific memories an individual aims to recall or improve recall for.