If a Client Has Many Assets Other Than the Portfolio

question 46

Multiple Choice

If a client has many assets other than the portfolio, then the relevant measure of the portfolio risk is

• A) total risk.
• B) standard deviation.
• C) market risk.
• D) unique risk.

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Definitions:

401k Retirement Accounts

Tax-advantaged retirement savings accounts offered by employers, allowing employees to save and invest a portion of their paycheck before taxes are taken out.

Enron Corp.

An American energy company based in Houston, Texas, that famously collapsed in 2001 due to widespread corporate fraud and corruption.

Diversified

A strategy that involves spreading investments across various financial assets, industries, or other categories to reduce risk.

Market Risk

The risk of losses in investments due to factors that affect the overall performance of the financial markets.