You Have a Portfolio of Two Risky Shares Which Turns

question 25

Multiple Choice

You have a portfolio of two risky shares which turns out to have no diversification benefit.The reason you have no diversification is the returns:

• A)are too small.
• B)move perfectly opposite of one another.
• C)are too large to offset.
• D)move perfectly with one another.
• E)are completely unrelated to one another.

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Definitions:

Respondent Behavior

A type of behavior that occurs as an automatic response to a specific stimulus, typically conditioned through association.

Operant Behavior

Behavior that is controlled by its consequences, including rewards and punishments, in the context of behaviorism.

Token Economy

A behavioral modification system where desired behaviors are reinforced with tokens that can be exchanged for rewards.

Collective Unconscious

The collective unconscious is a concept proposed by Carl Jung, referring to the part of the unconscious mind that is derived from ancestral memory and experience and is common to all humankind.