Question
Base your answer to both parts on the following information: Returns on asset 1 Returns on asset 1 5% 3% 8% 5% 3% 5% 5%
Base your answer to both parts on the following information:
| Returns on asset 1 | Returns on asset 1 |
| 5% | 3% |
| 8% | 5% |
| 3% | 5% |
| 5% | 3% |
| 3% | 8% |
| 5% | 5% |
PART 1)
A portfolio constructed by investing 50% of your capital in asset 1 and 50% in asset 2 will have 10% of the risk of a portfolio composed of either 100% of capital invested in either asset 1 or asset 2.
TRUE OR FALSE
PART 2)
A portfolio constructed by investing 50% of your capital in asset 1 and 50% in asset 2 will have 10% of the risk of a portfolio composed of either 100% of capital invested in either asset 1 or asset 2.
TRUE OR FALSE
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Introduction To Finance Markets, Investments, And Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
17th Edition
1119561175, 978-1119561170
