In General, Which Stocks Should Be Combined into a Portfolio

question 73

Multiple Choice

In general, which stocks should be combined into a portfolio if the goal is the greatest reduction possible in overall portfolio 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:

Conscience

An inner feeling or voice acting as a guide to the rightness or wrongness of one's behavior, often associated with moral and ethical judgments.

Alexander Hamilton

A Founding Father of the United States, who was an influential interpreter and promoter of the U.S. Constitution, as well as the founder of the nation's financial system, the Federalist Party, and the Coast Guard.

John Quincy Adams

The sixth President of the United States, serving from 1825 to 1829, known for his diplomatic contributions before his presidency and his advocacy for various causes, including anti-slavery, during his post-presidency in Congress.

American Vision

The concept or perception of the United States' identity, values, and goals, especially as it relates to its future direction and place in the world.