Figure 9-5

question 297

Multiple Choice

Figure 9-5. On the graph, x represents risk and y represents return.

-Refer to Figure 9-5. Which of the following statements is correct?

• A) At point A the standard deviation of the portfolio is 3.
• B) A risk averse person always will choose to be at point A.
• C) At point D the portfolio consists of about 15 percent stocks and 85 percent safe assets.
• D) The figure shows that the greater the risk, the greater the return.

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Definitions:

Fat

A natural oily or greasy substance occurring in animal bodies, especially when deposited as a layer under the skin or around certain organs.

Calories

A unit of energy used to measure the amount of energy contained in food and drink and the energy expended during physical activity.

Gram

A metric unit of mass equal to one thousandth of a kilogram, commonly used to measure small quantities of substances.

Hemoglobin

A protein in red blood cells responsible for transporting oxygen from the lungs to the rest of the body.