How does the text categorize risk management techniques? Option: "Based on the number of trading positions", "Based on market capitalization", "Based on the trader's risk tolerance", "Based on investment strategies"

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How does the text categorize risk management techniques?

"Based on the number of trading positions"

"Based on market capitalization"

"Based on the trader's risk tolerance"

"Based on investment strategies"

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In the context of investment portfolio management, what is the strategy of spreading investments across various asset classes to mitigate risk?

Value Investing

Speculative Investing

Diversification

Portfolio Concentration

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What is the primary reason the author dislikes the 'Unit per fixed amount' position sizing model?

"Its reliance on advanced statistical analysis"

"Its complexity and difficulty in implementation"

"Its lack of consideration for risk"

"Its incompatibility with intraday trading"

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What is the key principle behind the 5% rule in position sizing?

Holding a stock for a minimum of 5 days before selling

Investing only in the top 5% of performing stocks

Limiting the risk on any single trade to 5% of total capital

Diversifying investments across at least 5 different asset classes

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What are the two main types of risk that investors face?

Systematic risk and unsystematic risk

Inflation risk and interest rate risk

Market risk and credit risk

Political risk and currency risk

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How do Index Funds mitigate risk for investors?

"By investing exclusively in government bonds"

"By diversifying investments across various asset classes"

"By concentrating investments in a single high-performing stock"

"By avoiding investments in the stock market altogether"