Amanda Talks with Several Different Brokers at a Social Gathering

question 442

Multiple Choice

Amanda talks with several different brokers at a social gathering. She hears the following advice from brokers A, B, and C. Which broker, if any, gave her incorrect advice?

• A) Broker A: "There are risks in holding stocks, even in a highly diversified portfolio."
• B) Broker B: "Portfolios with smaller standard deviations have lower risk."
• C) Broker C: "Stocks with greater risks offer lower average returns."
• D) They all gave her correct advice.

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Definitions:

Job Rotation

Rotating employees to different tasks and jobs in an organization.

Psychological State

The mental condition of an individual at a particular time, influenced by emotions, thoughts, and behaviors.

Job Characteristics Model

A theory that proposes that the nature of a job affects employee motivation and job satisfaction, focusing on five core job dimensions.

Job Involvement

A cognitive state of psychological identification with one’s job and the importance of work to one’s total self-image.