If the Plot of a Portfolio's Returns Against Returns on the Market

question 48

Multiple Choice

If the plot of a portfolio's returns against returns on the market index produces a tight pattern,then the portfolio:

• A) appears to be well diversified.
• B) has a beta of 0.
• C) has very little systematic risk.
• D) has a risk premium lower than the market.

---

Definitions:

Personality Disorders

A group of mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience.

Gender Stereotypes

Generalized views or preconceptions about attributes, characteristics, or roles that are or should be possessed by, or performed by, women and men.

Psychological Problem

An issue or condition impacting mental health or wellbeing, often requiring professional diagnosis and treatment.

Medical Model

An approach to understanding and treating mental disorders by focusing on biological and physiological explanations and treatments.