Portfolio Protection Strategies
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Questions and Answers

What is the primary focus of the strategies mentioned in the text?

  • Growing assets rapidly
  • Increasing risk tolerance
  • Maximizing portfolio size
  • Preserving capital (correct)

What type of risk can be reduced or eliminated through diversification?

  • Market risk
  • Systematic risk
  • Unsystematic risk (correct)
  • Portfolio risk

What is the purpose of adding non-correlating assets to a portfolio?

  • To increase portfolio size
  • To reduce unsystematic risk
  • To reduce systematic risk (correct)
  • To increase systematic risk

What happens to non-correlating assets during market downturns?

<p>They move in inverse directions (A)</p> Signup and view all the answers

What is the goal of the investment strategy mentioned in the text?

<p>To enhance portfolio resilience (B)</p> Signup and view all the answers

What is the main benefit of using non-correlating assets in a portfolio?

<p>More balanced returns (A)</p> Signup and view all the answers

What is the primary purpose of buying put options in a rising stock?

<p>To lock in profits and protect against potential losses (C)</p> Signup and view all the answers

What is the main difference between hard stops and other types of stop-loss orders?

<p>Hard stops are set at a fixed price, while other stops are set at a percentage (D)</p> Signup and view all the answers

What is a key advantage of investing in dividend-paying stocks?

<p>Regular income through dividend payments (D)</p> Signup and view all the answers

What is the key feature of principal-protected notes with equity participation rights?

<p>They offer a guaranteed return of principal, along with equity participation (C)</p> Signup and view all the answers

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