If an Investor Owns a Well-Diversified Portfolio, Then

question 108

Multiple Choice

If an investor owns a well-diversified portfolio, then:

• A) His portfolio does not involve any risk
• B) The idiosyncratic risk in his portfolio is minimized
• C) The systemic risk in his portfolio is minimized
• D) His portfolio will have the highest expected return

---

Definitions:

Type A Personality

A personality trait characterized by high levels of competitiveness, self-imposed stress, and a constant sense of urgency.

Multitasking

The action or capability of handling more than one task simultaneously or switching between tasks quickly.

Cognitive Dissonance

The psychological discomfort experienced by an individual who holds two or more contradictory beliefs, values, or ideas simultaneously.

Psychological Discomfort

a state of emotional or mental unease, often associated with anxiety, stress, or uneasiness.