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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 coefficient A,B between 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 of A,B,

a.

sometimes the risk of P will be higher and sometimes lower

b.

cannot tell

c.

the higher the risk of P

d.

the lower the risk of P

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