Figure 8-2

-In Figure 8-2, which of the following moves can be explained by a decrease in the prices of stock on the NASDAQ?
A)A to B
B)A to C
C)A to D
D)A to E

Question

Figure 8-2
​ 
-In Figure 8-2, which of the following moves can be explained by a decrease in the prices of stock on the NASDAQ?
A)A to B 
B)A to C 
C)A to D 
D)A to E

Quizplus · Accepted Answer

A decrease in the prices of stock on the NASDAQ would lead to a decrease in demand for tech stocks, which are primarily traded on the NASDAQ. This would result in a decrease in the value of the NASDAQ and therefore cause a decrease in the value of the tech-heavy portfolio represented by point A. Moving from A to C represents a shift away from the tech-heavy portfolio and towards a more diversified portfolio, which would be a logical response to a decrease in the prices of tech stocks.

Figure 8-2 ​

Figure 8-2