When Stocks with the Same Expected Return Are Combined into a Portfolio

question 18

Multiple Choice

When stocks with the same expected return are combined into a portfolio:

• A) the expected return of the portfolio is less than the average expected return of the stocks.
• B) the expected return of the portfolio is greater than the average expected return of the stocks.
• C) the expected return of the portfolio is equal to the average expected return of the stocks.
• D) there is no relationship between the expected return of the portfolio and the expected return of the stocks.

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Definitions:

Sacrifice

The act of giving up something valued for the sake of something else regarded as more important or worthy.

Syllogistic Steps

The sequence of logical deductions in a syllogism where a conclusion is inferred from two or more premises.

Virtuous

Exhibiting virtues such as moral excellence, righteousness, and adherence to ethical principles in behavior and character.

Rude Person

An individual who behaves in a manner that is socially inappropriate, showing little respect or consideration for others.