The Addition of a Negative Risk Asset to a Portfolio

question 30

Multiple Choice

The addition of a negative risk asset to a portfolio of assets will:

• A)Increase the portfolio's expected return
• B)Decrease the portfolio's expected return
• C)Increase the portfolio's expected volatility
• D)Decrease the portfolio's expected volatility

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Definitions:

Enforceable Contract

An enforceable contract is a legally valid agreement between two or more parties, which can be upheld and compelled by the courts.

Tablet

A portable computing device featuring a touch-sensitive screen that can be used for reading, browsing the internet, or running applications.

Running Shoes

Footwear specifically designed for jogging or running, emphasizing comfort, durability, and performance.

Oral Contract

An agreement between parties that is made verbally and is as legally binding as a written contract, though harder to prove.