Decreasing the Number of Stocks in a Portfolio from 50

question 69

Multiple Choice

Decreasing the number of stocks in a portfolio from 50 to 10 would likely ________.

• A) increase the systematic risk of the portfolio
• B) increase the unsystematic risk of the portfolio
• C) increase the return of the portfolio
• D) decrease the variation in returns the investor faces in any one year

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Definitions:

Motivational Strategy

Techniques or approaches used to inspire oneself or others to engage in certain behaviors or achieve goals.

Confidence

The feeling of self-assurance arising from an appreciation of one's own abilities or qualities.

Easily Distracted

A state where an individual's attention shifts frequently from one task to another with little focus.

Win-Win Solution

An outcome of a negotiation or conflict resolution where all parties involved perceive themselves as having benefited equally.