The Incremental Risk to a Portfolio from Adding Another Stock

question 71

Multiple Choice

The incremental risk to a portfolio from adding another stock:

• A)Is always greater than the average portfolio risk
• B)Is always less than the average portfolio risk
• C)Is always positive
• D)Is often positive but can be negative

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Definitions:

Blood Vessel Inflammation

A condition also known as vasculitis, involving the swelling and irritation of the blood vessels, which can restrict blood flow and lead to various health problems.

Chronic Stress

A continuous state of emotional pressure and distress occurring over a prolonged period, capable of affecting an individual’s physical and mental health.

Heart Disease

A broad term for conditions affecting the heart or blood vessels, often associated with plaque buildup in arterial walls, leading to heart attacks or strokes.

High Blood Pressure

A condition where the force of the blood against the artery walls is too high, often leading to heart disease.