Which of the following does not help reduce the risk that people face ?
Correct answer: A. increasing the rate of return within their portfolio
- A. increasing the rate of return within their portfolio
- B. diversifying their portfolio
- C. All of these answers help reduce risk
- D. buying insurance
Explanation
A higher rate of return does not by itself reduce risk and may involve accepting greater risk. Diversification and insurance reduce exposure by spreading or transferring risk.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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