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:

Richest Quintile

Refers to the top 20% of the population in terms of income or wealth.

Poorest Quintile

The segment of the population that falls into the bottom 20% in terms of income or wealth, often used in statistical analyses of economic inequality.

Genetically Program

The process of determining or influencing the traits of an organism by modifying its genetic material.

Fetal Development

The process of growth and maturation of a fetus inside the uterus from conception to birth.