Angela Reads Financial Advice Columns and Concludes the Following

question 112

Multiple Choice

Angela reads financial advice columns and concludes the following.Which,if any,of her conclusions are incorrect?

• A)Higher average returns come at the price of higher risk.
• B)People who are risk averse should never hold stock.
• C)Diversification cannot eliminate all of the risk in stock portfolio.
• D)None of her conclusions are incorrect.

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Definitions:

Demand Function

A mathematical expression showing the relationship between the quantity demanded of a good and its price, holding other factors constant.

Supply Function

A numerical model illustrating how the amount of a product provided is related to its cost.

Subsidy

A subsidy is a financial contribution provided by the government or a public body to support businesses, consumers, or sectors, reducing the price of goods or services.

Supply Function

A supply function is a mathematical relation that shows how the quantity supplied of a good is influenced by its price and possibly other factors, such as production cost.