Which of the Following Is Most Likely to Occur as You

question 69

Multiple Choice

Which of the following is most likely to occur as you add randomly selected stocks to your portfolio, which currently consists of 3 average stocks?

• A) The expected return of your portfolio is likely to decline.
• B) The diversifiable risk will remain the same, but the market risk will likely decline.
• C) Both the diversifiable risk and the market risk of your portfolio are likely to decline.
• D) The total risk of your portfolio should decline, and as a result, the expected rate of return on the portfolio should also decline.
• E) The diversifiable risk of your portfolio will likely decline, but the expected market risk should not change.

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Definitions:

Genotype

The genetic makeup of an individual organism, referring to the specific alleles carried by an organism.

Type A Blood

One of the four major blood types in the ABO blood group system, characterized by the presence of A antigens on the surface of red blood cells and B antibodies in the plasma.

Founder Effects

A form of genetic drift that occurs when a new population is established by a very small number of individuals from a larger population, leading to limited genetic variation.

Color-Blindness

A deficiency in the way someone sees color, making it difficult to distinguish certain shades of color, typically red and green.