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If two investments are perfectly negatively correlated: Select one: O a. diversification reduces both risk and the expected payoff. b. bets are perfectly hedged
If two investments are perfectly negatively correlated: Select one: O a. diversification reduces both risk and the expected payoff. b. bets are perfectly hedged and risks are canceled out. O c. diversification is not effective at reducing risk. O d. diversification reduces risk without changing the expected payoff.
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Money Banking and Financial Markets
Authors: Stephen Cecchetti, Kermit Schoenholtz
4th edition
007802174X, 978-0078021749
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