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:

Variables

Elements, features, or factors that are liable to vary or change within a study or experiment.

Representative Sample

A smaller group taken from a larger population that accurately represents the characteristics of the whole population.

National Election

The process by which citizens of a country vote to choose representatives or leaders at a national level.

Causes

The reasons or factors that bring about an effect or a result.