Consider an investor whose initial portfolio consists of only $($i$.$e$,100\%)$ Berkshire Hathaway $($BRK$)$stock$,$ The investor plans to replace $1\%$ of this BRK stock portfolio with a new stock, XYZ Corp. BRK stock has annualized return volatility of $20\%$ per year; and XYZ$\text{'}$s return volatility is $30\%$ per year. After this $1\%$ turnover, the portfolio's return volatility will $\_\_\_\_\_\_\_\_$ if and only if XYZ stock's return has a significantly $\_\_\_\_\_\_\_\_\_\_$correlation with BRK$\text{'}$s stock return. Select the best answer to fill in the blanks.

increase; positive

increase; less than one

decrease; less than one

Portfolios A and B are tied for the best choice

None of the above

Which exchange$-$traded fund's $($ETF$\text{'}$s$)$ return is most likely to have the lowest correlation with the overall US stock market return?

An ETF based on an index of small US stocks $($e$.$g$.,$ Russell $2000)$

An ETF based on global energy industry stocks

An ETF based on long$-$term US Treasury bonds

An ETF based on high$-$yield US corporate bonds