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question 39

Multiple Choice

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Investiment } A$ $\quad$$\quad$$\quad$$\quad$$\quad$$\text { Investment } B$
$\begin{array}{|l|l|l|l|l|}\hline & \text { Good year } & \text { Bad year } & \text { Good year } & \text { Bad year } \\\hline \text { Probability } & 0.80 & 0.2 & 0.90 & 0.1 \\\hline \text { Pay-off } & 140 & 45 & 110 & 70 \\\hline\end{array}$
-Once a portfolio becomes sufficiently large,the __________ is of greatest importance with respect to risk.

• A) variance of individual asset returns
• B) variance of assetreturns within the same industry
• C) covariance between asset returns within the same industry
• D) covariance between asset returns of all assets in the portfolio

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Definitions:

Manufacturers

Companies or individuals that produce finished goods from raw materials through the use of machinery and labor.

Consumers

Individuals or groups who purchase goods and services for personal use or consumption.

M-commerce

Describes the conducting of commercial transactions using mobile devices, emphasizing the growing trend of using smartphones for shopping and payments.

Web Developer

A professional who specializes in the development of websites and web applications, focusing on aspects such as design, functionality, and user experience.