FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Diversification reduces risk _____. only if assets with smaller variances are added to the portfolio only if the correlation between every pair of risky assets

Diversification reduces risk _____.

only if assets with smaller variances are added to the portfolio

only if the correlation between every pair of risky assets is approximately zero

because the variance of large portfolios is determined more by covariances than variances

only if the risk-free asset is added to a portfolio of risky assets

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Macroeconomics

Principles Of Macroeconomics

Authors: Frank, Bernanke, Antonovics, Heffetz

3rd Edition

1259117162, 9781259117169

More Books

Students also viewed these Finance questions

Question

★★★★★
1. What is the ratio of mass to volume called? 2. What is friction in liquids called? 3. A spring that has been permanently deformed is said to have been deformed past its _____ _____. 4. List the...

Answered: 1 week ago

Question

★★★★★
Image segmentation is a key tool in computer vision (i.e., helping computers see the meaning in pictures). The article Efficient Quantum Inspired Meta-Heuristics for Multi-Level True Colour Image...

Answered: 1 week ago

Question

★★★★★
=+Recall Pats payoff table for purchasing an airplane ticket from the example on page 838.

Answered: 1 week ago

Question

★★★★★
What is the difference between the conventional test data approach and the integrated test facility approach?

Answered: 1 week ago

Question

★★★★★
On December 31, Year 1, Gaskins Co. owed $4,500 in salaries to employees who had worked during December but would be paid in January. If the year-end adjustment is properly recorded on December 31,...

Answered: 1 week ago

Question

★★★★★
Kevin bought 270 shares of Intel stock on January 1, 2018 for $78 per share with a brokerage fee of $170. Then, Kevin sells all 270 shares for $89 per share on December 12, 2018. The brokerage fee on...

Answered: 1 week ago

Question

★★★★★
"Saeed Al-Ghamdi" is the third employee to enter your office today, expressing his objection to the promotion of "Abdullah Ahmed" to a supervisory position, even though he only spent one year in the...

Answered: 1 week ago

Question

★★★★★
Loyalty to the organization is the paramount duty. It requires the individual to put the interests of the corporation before self-interest. Specifically, no director is permitted to gain personally,...

Answered: 1 week ago

Question

★★★★★
M&M Company manufactures a single product the claud . the following budgeted figures relate to the claud for one year period. Sales & production (units) 800 Sales $16,000 Production Costs: Variable...

Answered: 1 week ago

Question

★★★★★
You delegated the development of dessert recipe cards to Bobby. Bobby has completed the dessert cards ready for the deadline of March 10 th . Bobby has met with you to go through the dessert....

Answered: 1 week ago

Question

★★★★★
Question 19 (3 points) Listen Thames Inc.'s most recent dividend was $2.5 per share (Do = $2.5). The dividend is expected to grow at a rate of 4% per year. The risk-free rate is 3% and the return on...

Answered: 1 week ago

Question

★★★★★
Able to identify key HRM challenges facing organizations undergoing major change.

Answered: 1 week ago

Question

★★★★★
Aware of differences in the role of employees unions.

Answered: 1 week ago

Question

★★★★★
Aware of drivers for ongoing training and development within organizations.

Answered: 1 week ago

Previous Question Next Question