Two Risky Assets Can Be Combined to Lower the Overall

question 135

Multiple Choice

Two risky assets can be combined to lower the overall risk of a portfolio.This principle is commonly referred to as

• A)blending
• B)asset allocation
• C)dissection
• D)portfolio segmentation
• E)none of the above

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Definitions:

Milgram

Refers to Stanley Milgram, an American social psychologist best known for his controversial experiments on obedience to authority figures, conducted in the 1960s.

Innocent Stranger

A concept referring to an individual who is perceived as not guilty of any wrongdoing or malice.

Conformity

The act of altering one's behaviors, attitudes, or beliefs to match those of a group or to meet the expectations of others.

Task Difficulty

Task Difficulty refers to the level of challenge presented by a task, which can significantly influence performance and outcome.