When the overall market experiences a decline of 8%, an investor with a portfolio of aggressive stocks will probably experience:
A)negative portfolio returns of less than 8%.
B)negative portfolio returns of greater than 8%.
C)positive portfolio returns of less than 8%.
D)positive portfolio returns of greater than 8%.

Question

Quizplus · Accepted Answer

Aggressive stocks tend to have higher volatility and therefore experience bigger declines during market downturns. Therefore, it is likely that an investor with a portfolio of aggressive stocks will experience negative returns greater than the 8% decline of the overall market.

When the Overall Market Experiences a Decline of 8%, an Investor