Modern Portfolio Theory Suggests That

question 121

Multiple Choice

Modern portfolio theory suggests that:

• A)it is always wise to create a stock portfolio that captures a high average rate of return.
• B)the higher the expected return, the higher the portfolio's risk.
• C)it is always wise to create a stock portfolio consisting of similar stocks.
• D)a riskless portfolio is always the wisest alternative.

---

Definitions:

Sociometric Structure

The pattern of relationships and social networks within a group, measured through sociometric techniques.

Attraction Structure

The pattern or framework of how attractions (social, sexual, or otherwise) are organized within a social group or society.

Interactionist Theory

A theory that emphasizes that the development of individuals is shaped by the interaction of personal characteristics and the environmental or social context.

Psychological Dynamic

The interplay of various psychological forces or factors that influence behavior and mental states.