The Most Important Criteria When Adding New Investments to a Portfolio

question 35

Multiple Choice

The most important criteria when adding new investments to a portfolio is the

• A) expected return of the new investment.
• B) standard deviation of the new investment.
• C) correlation of the new investment with the portfolio.
• D) selection of the risk-free asset.
• E) variance of the risk-free asset.

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Definitions:

Diploid Number

The total number of chromosomes in a cell or organism, representing two sets—one from each parent.

Gametes

Reproductive cells (sperm in males and eggs in females) that unite during fertilization to form a new organism.

Somatic Cells

Any cell of a living organism other than the reproductive cells, forming the body of the organism.

Meiosis

A specialized type of cell division that reduces the chromosome number by half, resulting in the production of gametes or spores.