A. Increasing the number of shares from 10 to 20
B. All of these answers provide the same amount of risk reduction
C. Increasing the number of shares in the portfolio from 1 to 10
D. Increasing the number of shares from 20 to 30
Related Mcqs:
- Compared to a portfolio composed entirely of shares a portfolio that is 50 percent government bonds and 50 percent shares will have a ?
A. lower return and a lower level or risk
B. lower return and a higher level of risk
C. higher return and a lower level or risk
D. higher return and a higher level of risk - Micheal Roemer’s three-sector model shows that growth in the booming export sector I- reduces the price of foreign exchange II- retards other sectors’ growth by reducing incentives to export other commodities III- reduces incentives to replace domestic goods for imports IV- raises factor and input prices for non-booming sectors ?
A. I and III only
B. II and III only
C. I, II and III only
D. I, II , III only IV - Suppose two economists are arguing about policies that deal with unemployment One economist says the government should fight unemployment because it is the greatest social evil The other economist response Nonsense Inflation is the greatest social evil These economists ?
A. really don’t disagree at all It just appears that they disagree.
B. disagree because they have different values.
C. none of these answers.
D. disagree because they have different scientific judgments. - The normal rate of profit for relatively risk-free firms will be _________ the interest rate on risk-free government bonds?
A. approximately one-half
B. smaller than
C. larger than
D. approximately equal to - Which of the following is a form of international reserve assets, created by IMF in 1967 whose value is based on a portfolio of widely used currencies ?
A. Special Drawing Right (SDR)
B. IMF Drawing Rights (SDR)
C. International Drawing Right (IDR)
D. Sure, Drawing Rights (SDR) - Which of the following is an example of foreign portfolio investment ?
A. Toyota builds a new plant in the north of England
B. EDF of France buys shares in Scottish & Southern Energy of the UK, and Scottish & Southern Energy uses the Proceeds to build a new hydro-electric power station in Scotland
C. Deutsche Bank of Germany buys some new software from UK Supplier
D. JCB builds a new plant near Manchester - Diversification of portfolio can ?
A. reduce aggregate risk
B. eliminate all risk
C. increase the standard deviation of the portfolio’s return
D. reduce idiosyncratic risk - Which one of the following is not a characteristic that reduces the cost of a signals currency ?
A. A high degree of labour mobility among the countries of the common currency area
B. A high degree of capital mobility among the countries of the common currency area
C. None of the characteristics described in these answers They are all characteristics that reduce the cost of a single currency
D. A high degree of trade integration among the countries of the common currency area - What is referred by the term ‘Portfolio ?
A. A collection of investments, real or financial
B. Net assets of a company
C. Total profit of company in a year
D. Total unmovable assets of a company - In a portfolio investment ?
A. investors are directly involved in managing the operations
B. as in direct investment investors export goods and services abroad
C. investors transfer the technology to local investors
D. investors have no control over operations
