The Most Important Decision to Make When Building a Diversified

question 37

Multiple Choice

The most important decision to make when building a diversified stock portfolio is:

• A)individual security analysis.
• B)asset allocation.
• C)minimization of market risk.
• D)maximization of expected return.

---

Definitions:

Perfect Tender Rule

A principle in commercial law that allows buyers to reject goods if they do not meet all contract specifications, regardless of how minor the defect may be.

Material Breach

A substantial breach of a significant term or terms of a contract that excuses the nonbreaching party from further performance under the contract and gives the nonbreaching party the right to recover damages.

Substantial Performance

A legal concept in contract law where a party has performed enough of their contractual obligation to warrant payment, albeit with minor deviations from the terms.

Nonconforming Goods

Products delivered under a sales contract that do not meet the specifications, quality, or quantity requirements agreed upon by the buyer and seller.