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Answer with a clear true/false, and provide a detailed explanation to substantiate your answer: a. An optimal portfolio should never include assets whose expected return
Answer with a clear true/false, and provide a detailed explanation to substantiate your answer:
a. An optimal portfolio should never include assets whose expected return and standard deviation are dominated by other available assets.
b. For the diversification effect to kick in, one needs negatively correlated assets in the portfolio.
c. As more and more assets are added to a portfolio, its total risk would typically fall at a decreasing rate.
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