Question
Are the two following statements correct? Statement 1: Risk that can be eliminated through diversification may be called firm-specific risk. Statement 2: The correlation coefficient
Are the two following statements correct? Statement 1: Risk that can be eliminated through diversification may be called firm-specific risk. Statement 2: The correlation coefficient between two assets equals the product of their variances divided by their covariance.
| A. | Yes | |
| B. | No. Both statements are incorrect. | |
| C. | No. Only statement 1 is correct. | |
| D. | No. Only statement 2 is correct. |
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International Financial Management
Authors: Jeff Madura
2nd Edition
0314430296, 978-0314430298
