Final answer:
The selection criteria in the Portfolio System includes all of the listed options: criteria for selecting investments, evaluating investment performance, and managing risk. Equities, portfolio diversification, the role of stockbrokers, and securities exchanges are part of this system's considerations.
Step-by-step explanation:
Portfolio System Selection Criteria
The selection criteria in the Portfolio System consists of all of the above: criteria for selecting investments, criteria for evaluating investment performance, and criteria for managing risk. When selecting investments, investors look for equities that fit within their investment goals and risk tolerance. Portfolio diversification is essential as it minimizes risk by spreading investments across various financial instruments, industries, and other categories. A stockbroker plays a vital role in helping investors buy and sell securities on a securities exchange, which is a marketplace for buying and selling such investment products.
To purchase stocks, someone can go to a securities exchange, often through a broker or an online trading platform like E-Trade. Diversifying one's portfolio is important to reduce the impact of potential losses from any single investment. Different types of financial assets come with different levels of risk, and assessing these risks is crucial before making an investment. The performance of two different investment approaches, one methodical and the other haphazard, is likely to be markedly different, with the methodical approach generally expected to perform better in the long run.