An Ecosystem

question 15

Multiple Choice

An ecosystem

• A) includes only the plants within a particular area.
• B) includes all the living organisms within a specific area, but not the abiotic factors.
• C) includes both living and abiotic factors within a particular region.
• D) always includes equal numbers of plant and animal species.
• E) only refers to biotic factors in a region.

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Definitions:

Treynor-Black Model

A portfolio optimization model that blends a risky asset portfolio optimized for maximum Sharpe ratio with a risk-free asset.

Full Diversification

The process of spreading investments across various assets to reduce exposure to risk from any single asset.

Nonsystematic Risk

The risk associated with an individual investment or a small group of investments, which can be mitigated through diversification.

Treynor-Black Model

An optimization tool used by portfolio managers to balance the trade-off between risk and return by combining actively selected securities with a passively managed market portfolio.