A Risky Portfolio Is One That

question 130

Multiple Choice

A risky portfolio is one that:
I. is poorly diversified.
II. has a volatile stock in a basket of 200 stocks.
III. has a positive correlation between most of its stock prices.

• A) I only
• B) II and III only
• C) I and III only
• D) I, II, and III

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Definitions:

Foreseeable Misuse

The misuse of a product or service in a manner that could reasonably be predicted by the manufacturer or provider, potentially leading to harm or liability.

Limit Liability

means to legally restrict the amount of money a person or organization can be responsible for paying in the case of a lawsuit or debt.

Injuries

Physical or emotional harm caused to a person or damage to property.

Defective Product

A product that is unsafe, dangerous, or fails to meet normal standards of quality and performance, potentially causing harm to users.