A Good Way to Reduce Macro Risk in a Stock

question 9

Multiple Choice

A good way to reduce macro risk in a stock portfolio is to invest in stocks that:

• A) have only specific risks.
• B) have diversified away the macro risk.
• C) have low exposure to business cycles.
• D) pay guaranteed dividends.

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Definitions:

Negotiable Instrument

An instrument in writing that, when transferred in good faith and for value without notice of defects, passes a good title to the instrument to the transferee.

Contract of Carriage

An agreement between a carrier and a shipper for the transport of goods or passengers.

Title Document

Legal paperwork that proves ownership of a particular asset, such as real estate or a vehicle.

Special Import Measures Act

Legislation aimed at providing protection to Canadian industries against unfair trade practices such as dumping and subsidization by foreign companies.