The Market Portfolio Assumes

question 25

Multiple Choice

The market portfolio assumes

• A) only the most efficient security is included.
• B) at least 10 securities are included for diversification.
• C) all securities are included.
• D) only efficient securities are included.

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Definitions:

Liabilities

Financial obligations or debts owed by a business or individual to others that must be paid back.

Assets

Resources owned by a business or individual that have economic value and can contribute to future profits.

Excess Capacity

A situation in which a company can produce more goods or services than the market demands, often leading to idle resources or reduced production rates.

Efficient

The quality of achieving maximum productivity with minimum wasted effort or expense.