Rick Knows and Understands Chuck So Well That He Is

question 60

Multiple Choice

Rick knows and understands Chuck so well that he is willing to allow Chuck to act on his behalf. Rick is demonstrating ________.

• A) calculus-based trust
• B) identification-based trust
• C) cognitive-based trust
• D) affective-based trust

---

Definitions:

Reward-to-volatility Ratio

A ratio used to assess the return of an investment relative to its risk, calculated by dividing the excess return of an investment by its standard deviation.

Standard Deviation

A statistical measure of the dispersion of a set of data from its mean, often used to quantify the risk associated with a particular investment.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in one year or less, representing a secure, low-risk investment option.

Optimal Weights

The most efficient proportion of different assets in an investment portfolio, aiming to maximize returns and minimize risk.