Question
Assume that the correlation coefficient A,B between the rates of return of stocks A and B is negative. Also assume that you combine the two
Assume that the correlation coefficientA,Bbetween the rates of return of stocks A and B is negative. Also assume that you combine the two assets to form portfolio P. The, the higher the absolute value ofA,B,
a.the lower the risk of P
b.cannot tell
c.the higher the risk of P
d.sometimes the risk of P will be higher and sometimes lower
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Linear Algebra and Its Applications
Authors: David C. Lay
4th edition
321791541, 978-0321388834, 978-0321791542
