A. Which of the following statements correctly describe aspects of the diversification benefit associated with combining two assets into a portfolio? Group of answer choices

More than one of the other statements is correct.

In order to achieve any diversification benefit, the returns of the two assets must be less than perfectly positively correlated. W

hen the returns of the two assets are perfectly positively correlated, a zero-risk portfolio can be formed.

Holding all else constant, as the correlation coefficient between the returns of the two assets increases, the risk of the portfolio will be reduced.

B. Which of the following statements correctly describe characteristics of preference shares?

Group of answer choices

The required return on preference equity that is non-participating is expected to be greater than the required return from ordinary equity as the preference shareholders dont get the opportunity to benefit from the profits generated by the company.

Preference shares are often called hybrid securities because they can display characteristics of both debt and equity.

A participating preference share participates in the interest payments paid to debtholders.

None of the other statements are correct.