In a Portfolio of Three Different Stocks,which of the Following

question 76

Multiple Choice

In a portfolio of three different stocks,which of the following could not be true?

• A) The riskiness of the portfolio is less than the riskiness of each of the stocks if they were held in isolation.
• B) The riskiness of the portfolio is greater than the riskiness of one or two of the stocks.
• C) The beta of the portfolio is less than the beta of each of the individual stocks.
• D) The beta of the portfolio is greater than the beta of one or two of the individual stock's betas.
• E) None of the above (i.e. ,they all could be true,but not necessarily at the same time).

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Definitions:

Repression

A defense mechanism in psychoanalytic theory where distressing thoughts and feelings are unconsciously blocked from conscious awareness.

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety and internal conflicts.

Psychoanalyst

A therapist who employs psychoanalysis, a therapeutic approach developed by Freud that focuses on exploring unconscious motivations and conflicts.

Regression

A psychological defense mechanism where an individual reverts to an earlier stage of development in response to stress.