In the Markowitz Portfolio Approach,risk Is Reduced By

question 49

Multiple Choice

In the Markowitz Portfolio Approach,risk is reduced by:

• A)the diversification of assets.
• B)the correlation between assets.
• C)investing in arrangements that return cash to the firm at different times.
• D)investing in real assets rather than derivatives.

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Definitions:

Cognitive Explanations

Theories or accounts that explain human behavior and mental processes in terms of how people understand, think about, and interpret the world around them.

Depression

A common and serious medical illness that negatively affects how you feel, the way you think, and how you act, characterized by persistent feelings of sadness and/or a lack of interest in activities once enjoyed.

Negative Thinking

A cognitive pattern where individuals consistently anticipate the worst possible outcomes or view situations pessimistically.

Psychological Disorders

Patterns of behavioral or psychological symptoms that impact multiple areas of life and create distress for the person experiencing them.