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Firm A and Firm B are perfectly negatively correlated. If your portfolio contains an equal dollar amount of stock in Firm A and B ,
Firm A and Firm B are perfectly negatively correlated. If your portfolio contains an equal dollar amount of stock in Firm A and B what will be the risk of the portfolio?
It will be riskless
Firm Bs stock will influence it more because its variance is greater
Firm A will influence it more because its variance is greater
Firm As stock will influence it more because its standard deviation is greater
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