What is line "B" pointing to?
Definitions:
Moral Hazard
The situation where one party in a transaction has the opportunity to take risks because they know the other party will bear the costs.
Portfolio's Risk
Portfolio's risk is the level of uncertainty associated with the returns on a collection of assets held by an investor.
Stocks
Financial instruments representing ownership shares in a company, entitling holders to a portion of the company's profits.
Diversified Portfolio
An investment strategy that involves holding a range of different investment vehicles in order to reduce risk.
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