20. Diversification. In which of the following situations would you get the largest reduction in risk by

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20. Diversification. In which of the following situations would you get the largest reduction in risk by spreading your portfolio across two stocks? (LO3)

a. The stock returns vary with each other.

b. The stock returns are independent.

c. The stock returns vary against each other.

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Fundamentals Of Corporate Finance

ISBN: 9780073382302

6th Edition

Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus

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