In General, Which Stocks Should Be Combined in a Portfolio

question 29

Multiple Choice

In general, which stocks should be combined in a portfolio if the goal is to reduce overall risk?

• A)Stocks with returns that are positively correlated
• B)Stocks with returns that are negatively correlated
• C)Stocks with returns that are not correlated
• D)Stocks that have the highest expected returns

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Definitions:

Attribute of Grit

A quality of perseverance and passion for long-term goals, demonstrating resilience and determination.

Forced Sale

A situation where goods are sold under the pressure of external circumstances, often at a lower price than the market value.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts.

Startup Failure

The condition where a startup company cannot continue operations due to financial constraints, lack of market fit, management problems, or other reasons leading to its closure or insolvency.