You Are Considering Investing in One of the These Three

question 52

Multiple Choice

You are considering investing in one of the these three stocks:

If you are a strict risk minimizer, you would choose Stock ____ if it is to be held in isolation and Stock ____ if it is to be held as part of a well-diversified portfolio.

• A) A; B.
• B) B; A.
• C) C; A.
• D) C; B.
• E) A; A.

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Definitions:

Personal Gain

Pursuing actions or decisions primarily for self-benefit or personal advantage.

Cognitive Dissonance Theory

A concept in social psychology that describes the discomfort felt by an individual who holds contradictory beliefs, ideas, or values.

Attitudes

Psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor.

Conflict

A situation or internal state of discord arising from opposing or incompatible forces, desires, or interests.