The Risk on a Portfolio of Assets

question 18

Multiple Choice

The risk on a portfolio of assets:

• A) is different from the risk on the market portfolio.
• B) is not influenced by the risk of individual assets.
• C) is different from the risk of individual assets.
• D) is negatively correlated to the risk of individual assets.

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Definitions:

Formal Operations

The stage in Piaget’s theory of cognitive development where adolescents and adults develop the ability to think about abstract concepts and logically test hypotheses.

Concrete Operations

A stage in cognitive development, according to Piaget, where children gain the ability to think logically about concrete events.

Preoperational Thought

A stage in cognitive development, according to Jean Piaget, where children aged 2-7 years are capable of using symbols and language but do not yet understand concrete logic.

Fluid Intelligence

Our ability to reason speedily and abstractly; tends to decrease during late adulthood.