The Addition of a Risky Security to a Fully Diversified

question 79

Multiple Choice

The addition of a risky security to a fully diversified portfolio:

• A)must decrease the portfolio's expected return.
• B)must increase the portfolio beta.
• C)may or may not affect the portfolio beta.
• D)will increase the unsystematic risk of the portfolio.
• E)will have no effect on the portfolio beta or its expected return.

Understand the relationship between the production of consumer goods and capital goods, and its impact on a nation's future growth rate.

Grasp the concept of marginal benefits and marginal costs, and their roles in determining the optimal output and resource allocation.

Understand the conditions under which an economy can achieve points beyond its production possibilities curve through international trade.

Recognize the factors that can cause the production possibilities curve to shift inward or outward.

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Definitions:

Facilities

Physical locations and structures that are designed to support and conduct various types of activities, such as sports, education, or business operations.

Offering

Refers to a product, service, or investment opportunity presented to the market by a business or individual.

Customer Value Proposition

A business or marketing statement that describes why a customer should buy a product or use a service, highlighting the unique value the customer will gain.

Return On Investment

A measure of the profitability of an investment, calculated by dividing the net profit from the investment by the cost of the investment, often expressed as a percentage.