Chapter Twelve Portfolio Opportunities and Choice This chapter contains 30 multiple choice questions,10 short problems,and 5 longer problems. Multiple Choice 1.A person's wealth portfolio consists of all one's and (a)retained earnings;credit (b)stocks;bonds (c)assets;liabilities (d)student loans;mortgages Answer:(c) 2.The principle of diversification usually applies to all (a)risk averse people (b)risk neutral people (c)risk tolerant people (d)b and c Answer:(a) 3.Which of the following decisions can be considered part of portfolio selection? (a)Whether to buy or rent one's house (b)What kind of life insurance to purchase (c)Whether to invest in stocks or bonds (d)All of the above Answer:(d) 12-112-1 Chapter Twelve Portfolio Opportunities and Choice This chapter contains 30 multiple choice questions, 10 short problems, and 5 longer problems. Multiple Choice 1. A person's wealth portfolio consists of all one’s ________ and ________. (a) retained earnings; credit (b) stocks; bonds (c) assets; liabilities (d) student loans; mortgages Answer: (c) 2. The principle of diversification usually applies to all ________. (a) risk averse people (b) risk neutral people (c) risk tolerant people (d) b and c Answer: (a) 3. Which of the following decisions can be considered part of portfolio selection? (a) Whether to buy or rent one’s house (b) What kind of life insurance to purchase (c) Whether to invest in stocks or bonds (d) All of the above Answer: (d)