In the Context of Investments in Securities (Stocks and Bonds)

question 41

Multiple Choice

In the context of investments in securities (stocks and bonds) , portfolio risk diversification refers to

• A)the time-honored adage "Don't put all your eggs in one basket".
• B)investors' ability to reduce portfolio risk by holding securities that are less than perfectly positively correlated.
• C)the fact that the less correlated the securities in a portfolio, the lower the portfolio risk.
• D)all of the above

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Definitions:

Exchange

The process by which parties trade goods, services, or financial instruments, facilitating the transfer of ownership and value.

Tomatoes

A versatile fruit commonly treated as a vegetable in culinary uses, known for its red color and variety of shapes and sizes, important in many cuisines worldwide.

Pumpkin

A large, round, orange vegetable that is commonly grown as a food source and used as decoration, especially during Halloween and Thanksgiving.

Opportunity Cost

Opportunity cost refers to the benefit that is missed or given up when choosing one alternative over another.