Internal States That Push an Individual Toward Behaving in a Certain

question 306

Multiple Choice

Internal states that push an individual toward behaving in a certain way are called:

• A)incentives
• B)drives
• C)instincts
• D)conditioned stimuli

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Definitions:

Factor Portfolio

A portfolio constructed to have a high sensitivity to specific risk factors, aiming to capture the risk premiums associated with those factors.

Well-diversified Portfolio

An investment portfolio constructed to minimize risk by spreading investments across various asset classes.

Beta

The volatility or risk associated with a specific investment relative to the broader market.

Systematic Risk

The unavoidable risk associated with the whole market or a segment of it, referred to as market risk, that diversification cannot mitigate.