A Stock That Is Considered to Be a Positive Risk

question 17

Multiple Choice

A stock that is considered to be a positive risk asset is added to a portfolio.As a result, the portfolio will:

• A)Have lower average returns
• B)Have a lower variance of returns
• C)Have a higher volatility of returns
• D)Have a lower correlation of returns with stock market indexes

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Definitions:

Social Readjustment Rating Scale

A scale that assigns numerical values to the stress level of different life events, used to assess an individual's risk to stress-related illnesses.

Immune System

The body's defense mechanism against infectious organisms and other invaders, comprising various cells, tissues, and organs that work together to protect the body.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood-glucose concentration; it plays a key role in the body's stress response and helps regulate metabolism, immune response, and blood pressure.

Infections

The invasion and multiplication of microorganisms such as bacteria, viruses, and parasites that are not normally present within the body.