Modern Portfolio Theory Is

question 87

Multiple Choice

Modern portfolio theory is

• A) a concept and procedure for combining securities into a portfolio to minimize risk.
• B) a concept and procedure for combining securities into a portfolio to maximize return.
• C) a concept and procedure for combining securities into a portfolio to maximize volatility.
• D) a concept and procedure for combining securities into a portfolio to maximize dollar return.

---

Definitions:

Perceived Risk

The level of risk an individual believes is associated with a specific action or decision, affecting their behavior and choices.

Channel Richness

The ability of a communication channel to effectively convey information, including the extent to which it can handle multiple cues and facilitate rapid feedback.

Status Differences

Differences between persons of higher and lower ranks.

Communication Barriers

Any obstacle that prevents clear understanding and exchange of information between individuals or groups.