Practice_Qs_Money

Practice_Qs_Money - Practice Qs Money _ 1. Risk aversion...

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Practice Qs Money ____ 1. Risk aversion helps to explain various things we observe in the economy, including a. adherence to the old adage, “Don’t put all your eggs in one basket.” b. insurance. c. the risk-return trade-off. d. All of the above are correct. ____ 2. From the standpoint of the economy as a whole, the role of insurance is a. to entice Risk-loving people to become risk averse. b. to promote the phenomenon of adverse selection. c. not to eliminate the risks inherent in life, but to spread them around more efficiently. d. not to spread risks, but to eliminate them for individual policy holders. ____ 3. As the number of stocks in a person’s portfolio increases, a. the risk of the portfolio increases, as indicated by the increasing value of the standard deviation of the portfolio. b. the risk of the portfolio increases, as indicated by the decreasing value of the standard deviation of the portfolio. c.
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Practice_Qs_Money - Practice Qs Money _ 1. Risk aversion...

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