A Portfolio Can Reduce Risk When Its

question 9

Multiple Choice

A portfolio can reduce risk when its

• A) investments do not move in tandem.
• B) investments move in tandem.
• C) returns of individual investments are similar.
• D) investments are from similar industries.

---

Definitions:

Statistic

A single measure, reported as a number, used to summarize a set of data.

Null Hypothesis

The hypothesis that there is no significant difference or effect, typically the hypothesis a researcher tries to disprove.

Distribution

Describes how the values of a variable are spread or distributed across different categories or intervals.

P > .05

Indicates that the probability of obtaining the observed data under the null hypothesis exceeds 5%, typically leading to failing to reject the null hypothesis.